Safaricom Sacco is seeking to raise Sh1 billion through the sale of shares to members to raise funds for real estate investments and grow its revenue base.
The sacco’s management said Wednesday it would use the money raised to, among other things, construct a 15-storey office complex in Nairobi’s Westlands area, opposite the Safaricom headquarters.
The sale of the shares has begun and is set to close on September 30, 2016.
“Safaricom Sacco is diversifying its portfolio to grow returns for members. Part of the funds mobilised will go into construction of the Safaricom Sacco office complex,” said the Sacco’s chief executive George Ochiri in a statement.
Mr Ochiri said the sacco is awaiting approval of the design of the complex from the Nairobi County government.
He said the organisation had already received approval from the Sacco Societies Regulatory Authority (SASRA) and the Capital Markets Authority (CMA) to mobilise new funds from members.
The building will have a swimming pool at the top, green energy and will be made of about 50 to 60 per cent glass. Only members are eligible to buy the shares. Recently, the sacco expanded its membership base to include employees of companies affiliated to Safaricom.
“The funds we raise will also go towards increasing the threshold for member’s loans to an upper limit of Sh10 million,” said Mr Ochiri.
He said the sacco planned to introduce collateral-backed lending. The company further said that it intended to introduce new products such as asset finance and mortgages.
“In the event we do not achieve full subscription, the board still has the option to review financing options from the financial market,” Mr Ochiri said.
The sacco was founded in 2001 targeting Safaricom employees who may want to borrow money from the host institution for investment.
It currently has 8,000 members and an asset base of Sh2.8 billion and is seeking to implement a strategic plan targeting to grow its business fourfold by 2018. Some 6,600 of the members have already taken loans with the sacco.
Of late, various saccos have been diversifying into other sectors to boost their revenue instead of relying on their core business of taking deposits and lending to their members.
One of the major attractions of the saccos has been relatively lower lending rates compared to other financial institutions such as commercial banks.