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By Seth ONYANGO
The Kenya National Police DT Sacco story is a bottom-up story, a story of consistent and cumulative progress over the last five decades that came from close collaboration among its members and the firm’s leadership.
As David Mategwa enters his decade as the National Chairman of Kenya National Police (KNPDT) Sacco, we take a look back and try to weigh the impact of his time in office thus far – but more specifically his rising influence on African Saccos.
For decades credit unions have extended small installment loans and lines of credit to millions of African households. The sector is now adopting digital solutions to power its next level of growth and boost financial inclusion on the continent.
From table banking to credit unions, Africa’s Savings and Credit Cooperative Organization (SACCO) sector is fast digitizing to bring financial inclusion to the last mile.
In December 2021, Kenyan fintech Kwara – for instance, designed to help credit unions in the East African state shift to digital platforms, raised 4 million US dollars in a seed round from Breega and the Softbank vision fund, demonstrating the level of interest and opportunity that exists in the sector.
The National Chairman of Kenya National Police (DT) Sacco Mr. David Mategwa is now upbeat that such tech innovation will give more underserved consumers access to a suite of financial services that would have been otherwise unavailable, or difficult to obtain, such as credit, savings, and pension.
While mobile money transfer solutions like M-PESA are already facilitating paperless transactions, Mategwa notes that smartphone apps provide a wider range of services.
“Members of a Sacco in far-flung areas are now able to transact without needing to visit a physical branch,” he said recently in a candid conversation with Financial Fortune Media.
It is on that premise that he pushed for the launch of Sacco’s M-Tawi app which enables its customers to open a savings account, get a loan, and pay bills.
According to Mategwa, the virtual branch (M-Tawi) is now the most active platform used by its members across the country.
He is hoping that similar adoption of mobile technology by Saccos in Africa will also lead to greater transparency and financial hygiene of most credit unions.
Mategwa hopes tech innovations will also help more Africans in the diaspora to join Saccos back home –– and use it to invest in the property market, their most preferred venture.
He said that tech has also made Saccos attractive to individuals who traditionally used commercial banks to mobilize funds for investment since the former offer good rates.
With Kenya’s Kwara’s neobank app, individuals will be able to sign up with their preferred credit unions to access various financial services on the go.
The platform provides omnichannel ways for members of a SACCO to transact – web apps, Android, IOS, and critical USSD that is simple, well understood from mobile money use, and does not require a smartphone.
Nigeria’s fintech startup Xend Finance is also applying decentralized finance (Defi) to credit unions in a bid to optimize operations and provide better yields.
Meanwhile, Mategwa, still an active police officer and one of Africa’s most sought-after credit union leaders, is pushing for the revival of the continent’s Saccos as the panacea for financial inclusion.
Mategwa is credited with helping set up the National Police Saccos of Malawi and Ghana, as well as cooperatives societies for the military of Zambia, Eswatini, and streamlining the operations of Ngome Sacco for the Tanzanian military and police.
Mid 2021 for instance, he met on the sidelines of the Western Block Regional Forum in Monrovia with Liberia’s Vice President Jewel Taylor and discussed ways of building a Sacco for Liberian women, as it emerged most of them prefer to lock cash in safes at home.
He is also having discussions with authorities in Sierra Leone to set up a similar outfit. And has this year – 2022 visited The United States of America (USA) and Ghana in an effort to spearhead those efforts.
Credit union profits return to members, who are shareholders, enabling these institutions to offer lower rates on loans, including mortgages, and higher yields on savings products.
According to Statista, as of 2019, the number of credit unions in Africa and Asia is markedly higher than in other regions of the world, accounting for almost 90 percent of the total number of credit unions worldwide.
As of 2019, there were around 39,600 credit unions in Africa and around 33, 6 000 in Asia. North America had 5,825, Europe (3,574), Latin America (2,808), the Caribbean (371), and Oceania (177).
World Council of Credit Unions (Woccu) figures released in October show that international credit union membership increased by 29 percent to 375 million year-on-year in 2020. Woccu reported a total of 375,160,065 credit union members in 118 countries.
In Asia, Africa, and Europe, men account for 60 percent of all credit union members, and in Latin America, women make up nearly half of all members.
Similarly, in Europe women account for more than 60 percent of credit union board directors and 51 percent of chief executive officers, while in Asia more than 70 percent of CEOs and board directors are men.
Journey to 50 years
Today, the happily married husband and a father to his adorable kids, Mategwa – a humble giant, thrives on having successfully turned around the initial negative discernment about the Sacco whose majority members are police officers.
He attributes the impressive performance of the 50-year-old Sacco, which opened its doors to the public last year, to good governance, education and training of members, and technology adoption.
The board in which he chairs also proposed to pay honoraria to directors and supervisory committee, staff bonuses, and an annual delegates allowance of Sh175 million, an increase from Sh141 million in 2020.
Equally, Sacco also has a scholarship program for bright orphans who score 360 marks and above in the Kenya Certificate of Primary Education (KCPE) – an initiative he modestly says is meant to give back to the community.
Mategwa, together with his team helped Kenya National Police Sacco become a savings and credit cooperative behemoth with over 67,000 members and an asset base of 390 million US dollars (Ksh44 billion) as of 2020.
In February this year, the institution through its board of directors recommended a payment of dividends on share capital at a rate of 17 percent amounting to Sh51.6 million, and interest on deposits at a rate of 10.8 percent or Sh2.4 billion, making a gross total of Sh2.9 billion.
The firm’s deposits grew by 10.3 percent from Sh21.3 billion to Sh23.5 billion at the end of 2021, while total assets grew from Sh39.1 billion in 2020 to Sh44 billion last year, a 12.7 percent growth.
And as it marks its 50th year anniversary today – Mategwa is optimistic that the mammoth financial unit will hit 50 Billion in total assets by Year End –with all signs pointing to surpassing that target already.
It is now the second-largest Sacco in Kenya based on assets and third in terms of membership.
Financial Fortune is a digital financial news website and print business magazine published in Nairobi by Fortune & Transit Publishers Ltd and covers the financial services sector through news, views and extensive people coverage since 2018.
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