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By Monica MUEMA
Amica Savings and Credit is banking on an improved business environment to meet its annual revenue targets for the year 2023.
The Sacco’s National Chairman Hezron Muchiri said at a press briefing that the company has earmarked deposit mobilization, loan book management, digital banking, and strategic partnerships as some of its key pillar growth areas for the target period.
“We project to generate a revenue of Sh1, 272,000,000 in the year 2023. We shall use Sh894, 000,000 of this revenue for our Sacco expenses, and the remaining Sh 378 Million will be retained as net income,” said Muchiri.
He was speaking during the firm’s recent special delegates meeting held in Murang’a, adding that the firm will also generate revenue from its interest income of Sh834 million, service income of Sh122, 200,000, and investments and other income of Sh103 million.
During the special general meeting, the Sacco told its delegates that it projects to record a growth of Sh1 billion by the end of this year despite the harsh economy and Sh1.2 billion in 2023.
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The growth is expected to be driven by member deposits and better management of the loan book.
It is currently training its workers on marketing skills and will soon start meeting its members in the grassroots, especially avocado, tea, coffee and dairy farmers. The firm has since embarked on training SMEs on saving small monies to benefit from cheaper credit.
Runaway inflation that has persisted for the largest part of the year, new taxes and depreciation of the shilling against world major currencies have hit several firms hard, most of whom have warned of reduced profitability.
Kenya’s Saccos regulator has since recommended voluntary mergers of some stressed institutions to reduce unnecessary competition and improve financial positions.
The Sacco Societies Regulatory Authority (Sasra) said in August that some savings and credit societies have failed to meet their obligations to members because of weak cash flows.
The regulator, in its annual report for 2021, recommended that some Saccos start a policy dialogue on voluntary mergers and consolidation in an effort to mend economic flouts in the financial sector.
The country’s annual inflation accelerated for the seventh consecutive month to 9.2 per cent in September, above market forecasts of 8.6 per cent and the ceiling of the Central bank’s target range of 2.5 per cent to 7.5 per cent.
September saw the services sector rebound for the first time since March, as companies stepped up hiring on stronger growth orders.
The firm which was feted the top MSME Central region taxpayer award for the 2022 Taxpayers Awards by the Kenya Revenue Authority (KRA) held last week, is however optimistic that the recently hiked interest rate by the Central bank will not hurt its revenue targets.
The Monetary Policy Committee raised the Central Bank Rate (CBR) to 8.25 percent at its September 29, 2022 meeting – a move that ordinarily pushes cost of credit to the borrower.
“Fortunately for us as a Sacco we do not expect such a challenge going forward, we will however keep our shareholders well informed on any market corrections if necessary,” offered the firm’s Chief executive James Mbui.
The company seeks to surpass the Sh978 million it posted for the year ended December 2021. Since the pandemic hit more than two years ago, small businesses were presented with unprecedented challenges including lockdowns, containment measures, with demand shifts in response to Covid-19 pushing many MSMEs to the brink.
The devastating Covid-19 pandemic negatively impacted on small and micro businesses (MSMEs), with most having to layoff, halt work, reduce employee salaries or temporarily shut down while other businesses chose to shut down, with just a few having reopened at full capacity.