Sacco eyes Sh 45 Billion in total assets by year end on new programme

By Steve Umidha

The Kenya National Police DT SACCO will hit in excess of 45 Billion in total assets by year end despite the existing pandemic shocks and the ongoing sector realignments, its leadership has said.

Through its financial literacy and investments programme for its members, the institution is optimistic of attaining the target by the end of 2021 in a drive that is also expected to see the Sacco net at least 7, 000 new members by June next year.

David Mategwa, the Sacco’s national chairman said the move – a first of its kind in the sector, has seen the firm pick 100 members from each of the eight regions and train them on widening their investments.

The target according to Mr. Mategwa is to hit 70,000 members ahead of its Jubilee celebrations next year with prospects to attain a Sh 50 Billion asset base by the end of 2022.

“It is a deliberate effort by the management and the Board if we are to boost our national ranking in the country not only in terms of service delivery but also our membership. These individuals will also act as Sacco’s ambassadors,” said Mategwa yesterday while addressing journalists.

Kenya national Police DT Sacco currently has 63,000 members largely drawn from the security agencies and other government employees but recently opened its doors to non-police offices in an effort to increase its membership.

It was crowned the best managed Sacco countrywide this year and the best in credit management countrywide. This is after the South African rating agency Global Credit Ratings (GCR) in June this year upgraded the firm’s rating, citing good asset quality, healthy funding and liquidity.

“The Sacco should continue to register a strong capital position into the long term, sustained by a conservative dividend policy and strong earnings,” noted the firm while upgrading the Sacco’s rating to “BBB+/A2” from “BBB/A3”previously.

It is today ranked the third largest Sacco in the country. In 2020, the Sacco recorded a 22.5 percent fall in net profit to Sh1.93 billion, largely on the back of higher interest expenses amid flat interest income as the industry offered softer repayment terms to members affected by the economic difficulties occasioned by the Corona-induced adversities.

The announcement comes as the Parliament is set to begin a debate on the new amendments to the Savings and Credit Cooperatives (Sacco) legislation, which seeks to among other factors boost confidence in a sector synonymous with corruption and mismanagement.

Amendments to the Sacco Societies Act (2008) was approved by the Cabinet in August this year and officially tabled on the floor on November 29, awaiting debate.

The Bill’s key object is to amend the Sacco Societies Act of 2008 by sanctioning the usage of innovative systems and ICT in collecting and receiving of statutory reports by Kenyan Saccos – a decision felt will help lessen wastage of member deposits in certain Saccos.

The proposed changes also seek to implement a deposit protection scheme for members of collapsed Saccos. Saccos are also on course with the implementation of an inter-Sacco lending market and eventual integration into the National Payments and Clearing system.

The proposed draft legal framework for the operationalization of the Central Liquidity Fund (CLF) will see Saccos lend and borrow money from each other thereby cutting ties with Commercial banks whose loans are considered very costly.

Under the new regime, Saccos will run their own inter-Sacco market where they can lend and borrow from each other at reasonable interest rates to offset their financial positions which was not possible in the past.