Metropolitan Sacco says it contracted the consultancy arm of Coop Bank to restructure its operations.
Under the rescue plan, Co-op consultancy arm said it has restructured the funding requirements to “better manage the members’ monthly loan demands as well as the overall liquidity flows aimed at a complete turnaround of the sacco.”
One of Kenya’s savings and credit co-operatives (saccos) accused of operating without effective accounting and control systems — putting billions of savers’ funds at risk — is now banking on a rescue by Cooperative Bank #ticker:COOP after teetering on the brink for months.
In a litmus test move, troubled Metropolitan Sacco, which has been on the spot amid allegations of risky lending announced it had contracted the consultancy arm of Coop Bank to restructure its operations.
Last year, the Sacco Societies Regulatory Authority investigators raided the sacco to establish its stability following an ambitious expansion that left it short of money to meet the needs of its more than 100,000 members. The investigations followed complaints by members that they could not access salaries or loans when they are channelled through the sacco’s banking system. The sacco that draws its membership from teachers around the country (formerly Kiambu Teachers Sacco) traced its precarious financial position to December when a high demand for deposit refunds could not be matched by its finances.
The sacco had also been struggling to service loans of Sh5 billion owed two commercial banks.
Under the rescue plan, Co-op consultancy arm said it has restructured the funding requirements to “better manage the members’ monthly loan demands as well as the overall liquidity flows aimed at a complete turnaround of the sacco.”
Co-op Bank director Vincent Marangu said in a statement the corporate restructuring programme, which began this month would ensure the sacco has “adequate working capital to support the members as well as improve the operational efficiency of the sacco”.
“We have done it before for a number of co-operatives with huge success, and therefore this will be in line with our mandate and commitment to the co-operative movement,” he said.
Following the new deal, the sacco said it “has stabilised its operations” adding that it was now focusing on “recovery of the outstanding loans while availing the recovered funds for on-lending to members.”
“We thank the Co-operative Bank for coming to our great support at such a critical moment,” said Metropolitan chairman Christopher Karanja.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
