Savings and Credit Co-operatives (saccos) have stepped up recruitment as they seek to boost capital for expansion and investment.
Metropolitan Teachers Sacco, Stima Sacco and Unaitas — formerly Muramati Sacco — are enlisting new members as they seek the critical numbers needed to support investments under a new law.
Metropolitan aims to raise Sh1 billion through the sale of 10 million shares to members, meaning that each share is going for Sh1,000.
The share sale, which began at the beginning of this month and will run for the next three months will see each member buy a minimum of 250 shares for Sh25,000.
“In order to finance growth and be able to roll out even more innovative products and services, we are offering strictly to our members an opportunity to purchase new shares in this enterprise ,” says Metropolitan’s share sale documents seen by the Business Daily.
The sacco, which is projecting to have at least 100,000 members in the next three years, says that the initiative will enhance capitalisation in line with the Sacco Societies Regulatory Authority (SASRA) compliance requirements.
SASRA now requires all sacco deposit-taking businesses to have a core capital of not less than 10 million shillings, must be more than four per cent of the total assets and which is expected to grow to 10 per cent over a four year period.
Metropolitan’s share sale to members only, started a few weeks after Unaitas which was rebranded from Muramati Sacco made its disclosure document public after the approval of the Capital Markets Authority (CMA).
Unaitas started a share sale directly to the public at the beginning of October 2010 running through December the same year but was stopped by the capital markets regulator because it was targeting the entire public and not members only.
According to the disclosure document, CMA has now given approval for investors who applied for shares in the capital raising offer to be admitted as members of the sacco.
At the time of the share sale, information on the sacco’s website showed the company had targeted to raise Sh200 million and according to the disclosure document, Sh65 million had been raised, with Sh33.8 million from existing members.
An additional Sh16.2 million had also been raised from existing front office services members and another Sh15 million from 2,717 new members.
The funds raised will be used by Unaitas to increase its branch network and renovate existing branches, expand its information communication and technology platform to include more automated teller machines and mobile banking and also comply with SASRA capital requirements.
After rebranding, Unaitas has become very active on social media, putting it in the league of commercial banks which are also competing for deposits from the public.
Saccos have traditionally focused on customers in rural areas but are now focusing on getting new ones even in urban areas to drive their growth.
Stima Sacco, which is also recruiting new members to help fund its expansion plans, this week said it has received Sh395 million from Shelter Afrique to support Stima Investments ongoing Syokimau gated community housing development.
Shelter Afrique is stepping in to fund the development of seventy six maisonettes, forty three bed roomed and thirty six four bed roomed units for Stima investments an investment company which carries out investment activities using Stima Sacco member’s funds.As at the end of 2010, Metropolitan Teachers Sacco had 11,624 members, Unaitas Sacco had 86,301 and Stima Sacco had 9,737.