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Harambee Sacco defies Coronavirus shocks

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By Steve Umidha

Harambee Sacco is anticipating growth in both revenue and profitability, on the back of last year’s impressive performance and strong government support, despite the uncertainties surrounding the coronavirus pandemic.

Speaking exclusively to this writer, the firm’s Chief executive George Ochiri said the company targets to raise its asset base by up to 34 Billion by end of the year from Sh 29.5billion it reported in 2019.

“The impact has been very minimal because we mainly service civil servants who were not impacted by pay cuts and layoffs as a result of the pandemic…we hope to grow the society by 15 per cent this year, so we are sure of having a balance sheet of about Sh34 Billion by end of 2020,” said Dr. Ochiri.

During that period, Harambee Sacco’s net profits grew by 85.7 per cent to Sh 100 million in 2019 from Sh 53.8 million recorded in the previous year – with assets worth Sh26.3billion as of 2018.

Member’s deposits and savings grew to Sh20.1 billion in 2019, however the Sacco experienced a high rate of withdrawals forcing it to pay out Sh1.34billion to 5455 members.

To boost that growth, the company has ear marked some of its prime properties for sale – with a huge chunk of its multi-billion shilling real estate property valued in excess of Sh3 Billion to be disposed of to increase its cash flow and liquidity as it continues in its turnaround plan.

In Kisumu for instance, the sacco is targeting 11 acres for sale to fetch Sh200 million while in Mombasa it is targeting to sell 16 maisonettes at Sh25 million each to raise about Sh400 million.

“This year we were to initiate disposal of some of our prime property like in Nyali but right now the property market is not at its best, but when the economy recovers those plans will kick off but Harambee is rich, richer than what is estimated in the books,” said Ochiri.

Harambee Sacco is currently ranked fourth largest deposit-taking institution behind Kenya Police Sacco, Mwalimu and Stima Investment Sacco, with Dr. Ochiri expecting an exponential growth owing to the strategies the company has employed since assuming the CEO post, having served in a similar position at Safaricom Sacco prior to joining Harambee.

“We have seen some of the policies such as tightening financial control flows, deepening IT systems we are putting in place bearing fruits,” he said, adding that, “We have also had to bring on board data analysts to help with the financial leakage.”

Last year saw the company suspend about 16 of its top officials in various departments that had been found culpable of mismanagement and outright fraud.

In July 2019, President Uhuru Kenyatta issued a directive for a Sacco Societies Fraud Investigation Unit to be set up to rein in rogue Sacco officials, following snowballing cases of fraud in the country’s Sacco societies.

Available figures by Sacco Societies Regulatory Authority (Sasra), show that the Kenyan deposit-taking Sacco segment has remained robust with total assets growing to over Sh400 billion.

Additionally, the institution is betting big on a regulatory consent to run a mortgage financial vehicle hoped to provide a major lift to the government’s affordable housing project that targets to put up half a million houses by 2022.

Harambee draws its membership mainly from, Kenya Defence Forces, National Police Service, National Youth Service, national and county governments, government Parastatals and departments and constitutional bodies.

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