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Sacco bets on set of reforms to turn around its fortunes

Metropolitan Sacco
Hundreds of members showed up to collect dividends from Metropolitan Sacco on April 08, 2019. FILE PHOTO | NMG 

Almost any business must always experiences ups and downs. This is the path that Metropolitan Sacco has travelled. While it has made admirable progress in its bid to enrich the lives of its members, it has also faced its fair share of challenges. The society, however, says it has always counted on its resilience and firm foundation to rise from setbacks and forge ahead in its mission to uplift the standard of living of its members.

After being started with just Sh20,000 by Kiambu teachers, Metropolitan has grown to be one the biggest saccos in the country. Its rapid growth has been an inspiring story for other savings groups who have striven to emulate its success story.

From its humble beginning, it now boosts 13 satellite offices and eight branches in Kiambu, Kisumu, Nakuru, Bungoma, Nairobi, Limuru and Thika.

Metropolitan chief executive officer (CEO) Benson Mwangi says in 1977, teachers from the district came together and pooled resources to form the society to transform their lives.

“It was aimed at mobilising members’ savings to offer financial services and products at competitive costs within a changing business environment while upholding co-operative ideals,” Mr Mwangi says.

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He adds that it now boosts over 50,000 active members with more than Sh7.5 billion in customers’ savings.

Its members are drawn from the Teacher Service Commission (TSC), government ministries and parastatals as well as private sector.

"Our asset value currently stands at above Sh15 billion while our loan book at Sh14.9 billion," he says.

Some of the services that the Sacco offers include savings, investments, front office services and loan products to existing and new members.

“We offer variety of accounts ranging from individual, groups/chamas, institutions, churches and companies accounts with associated access channels such as cheque books, ATM/Debit cards, mobile banking,” he says.

Their staff, he notes, has grown through the years from two to 121 who are distributed across its branches and satellite offices.

Moreover, it has issued over Sh25 billion in loans and advances to help members.

"We also have a nationwide reach and over 130 contributing employer organisations, a testament the Sacco has benefited more people,” he adds.

He says over a period of ten years, they have given out over Sh3.5 billion to members as dividend payouts and interest on deposits.

“The loan proceeds and dividend payouts have assisted our members to build homes, pay school fees and in many cases, establish businesses,” he says.

Muliro Wafula from Bungoma says the Sacco helped him further his education dreams.

“The bank gave me a loan to study for both my degree and masters,” says Mr Muliro who joined the society in 2004.

He adds that he has also built a modern six-bedroom house and started dairy farming in his native home of Bungoma thanks to the Sacco support.

“Through the Sacco, I was able to buy four dairy cattle that produces about 150 litres of milk daily. I sell the milk to the nearest hotels and homesteads that make me extra money,” he says.

Moreover, he has been able to refer 50 new members into the Sacco that he says has also extracted other members.

Lilian Ndenderu, who joined the Sacco over 19 years ago, says the Sacco has helped her meet financial objectives.

She says when her husband fell ill, the Sacco came to her rescue. The loans from the society, she says, enabled her to educate her six children while her husband was recuperating.

“It provided me with instant loans that allowed me to educate my children,” the retired teacher says.

Moreover, she notes that the annual dividends have helped her venture into new businesses.

“Through dividend, I have now built a water shop ,” she says.

Despite attaining such glory, it has not always been a bed of roses for Metropolitan Sacco.

Through the years, it has withstood tough economic times that have threatened its financial position.

"Some of the challenges included under-capitalisation, selling the idea to teachers and limited personnel," The CEO says.

In what was apparently the its lowest moment, in 2018 investigators from the Sacco Societies Regulatory Authority (Sasra) raided the Sacco to determine its sustainability following a rapid expansion that left it short of money to meet the needs of its members. The probe followed complaints by members that they could not access their salaries or loans when channelled through its banking system.

The Sacco then linked its shaky financial position to high demand for deposit refunds which strained its finances.

The CEO however says the Sacco has turned a corner, and is banking on new reforms to attain its former glory.

“The Sacco has taken up some bold transformational initiatives to achieve efficiency, strengthening of its foundations and creation of an exemplary member experience,” he says.

The Sacco also recovered Sh110 million in default loans last year, as part of efforts to have sacco in a sound financial status and provide more loans to members.

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