Mwalimu SACCO deposits up 7% despite COVID pain

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The National Mwalimu Sacco deposits by members surged by seven percent for the year ended December 31, 2021 at the height of the coronavirus pandemic that battered the economy.

The savings by teachers for the period under review amounted to Ksh.44.28 billion compared to Ksh.41.4 billion from the previous year.

Mwalimu SACCO members grew by 2,000 members bringing all together 106,602 members.

The turnover for the SACCO rose by Ksh.7.6 billion from Ksh.7.2 billion with the number of those taking up credit facilities dropping as the economy slowly normalizes thus causing a drop in Sacco’s loan portfolio.

Credit facilities dropped to Ksh.37.8 billion in 2021 compared to Ksh.38.07 in 2021.

“Despite a tough operating environment marked by the negative effects of COVID-19, slow employment of teachers and freeze on their salary increments, the Sacco registered tremendous growth in membership, deposits and asset-based, “Said Mwalimu Sacco chairperson John Onyango.

According to Onyango, the success was made possible by structured steps to streamline the business and cost optimization like Business growth, Customer Focus, Technologization, Governance, Risk and compliance enhancement and efficient Human capital Management.

Early last year, the SACCO introduced affordable products like Ufanisi loan, Waiver on commission on commercial loan buy off, the roll-out of Kenya mortgage Refinancing loan, Review of Pro-data, Provision of advance against dividends and enhancement of Wezesha loan from the previous limit of Ksh.600,000 to a borrower capacity in a bid to meet members’ financial needs.

The SACCO IS eyeing the disposal of its banking unit Spire Bank by the end of March 2022.

In a communique to members in January, Onyango said details of the proposal will be clear by the end of the quarter as the teacher’s Cooperative seeks to take the bank out of its hands by way of sale of liquidation.

“The Sacco is currently engaging both regulators, the Central Bank of Kenya and SASSRA as well as potential entities to take over Spire Bank completely off Mwalimu National’s ownership,” he said.

With regards to its recent deposit to capital conversion, Mwalimu said the move does not afford the bank a new lease of life but is rather a process allowing for the voluntary liquidation of the bank.

“The end game of the strategy is to take the bank off the Sacco’s hands by March 2022 so that Mwalimu National Sacco can focus on its core business of mobilising members’ savings and offering access to credit. It’s time for the Sacco to cut its losses emanating from the Spire bank venture and that must be done now,” added Mr. Ochieng.

Spire Bank has been majority-owned by Mwalimu National Sacco since its 2015 acquisition from businessman Neushad Merali.

The bank has since drained all of its shareholder funds after accumulating more than Ksh.9 billion in losses across six years.

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