Stima Sacco, one of Kenya’s most decorated Saccos has documented a turnover growth of 16% to Ksh.6.86 billion in the year 2021 from Ksh.5.89 billion recorded in the year 2020. During the financial year under review, the Sacco’s share capital also grew from Ksh.2.02 billion to Ksh.2.38 billion, deposits increased by 9.7% from Ksh. 31.19, billion to Ksh.34.21 billion and the Sacco’s loan book grew by 10% from Kshs. 32.80 billion to Kshs. 36.35 billion.
Stima DT Sacco has recorded a satisfactory performance for the year ended 31st December 2021 despite the negative effects to the economy occasioned by the Covid-19 pandemic.
Turnover was at Kshs. 6.86 billion in 2021 from Kshs. 5.89 billion in 2020, a growth of 16%. This was as a result of an aggressive growth in the loan portfolio, product enlargement, lending reforms and improved liquidity attributed to members scaling up the savings in the Sacco in the year under review.
According to the financial report tabled before delegates at the Sacco’s 48th Annual General Meeting, the Society’s capitalization program, coupled with the shares drive campaign dubbed ‘Weka Tuweke’, alongside aggressive member education on Financial Management and Investments contributed to the paid-up share capital growth from Kshs. 2.02 billion to Kshs. 2.38 billion.
“I take this opportunity to thank all Sacco members, the Board of Directors, the Supervisory Committee, Delegates, Management, Staff, and all other stakeholders for the good performance recorded by Stima Sacco in 2021 despite the challenges presented by the COVID-19 pandemic,” noted Stima DT Sacco National Chairperson, Mrs. Rebecca Miano who is also the Chief Executive Officer Kenya Electricity Generating Company (KENGEN).
Deposits increased by 9.7% from Kshs. 31.19 billion in 2020 to Kshs. 34.21 billion in the year under review. The loan book grew by 10% from Kshs. 32.80 billion to Kshs. 36.35 billion. The Sacco’s balance sheet grew by 13% from Kshs. 41.06 billion in 2020 to Kshs. 46.48 billion in 2021.
Speaking during the AGM, Stima DT Sacco Chief Executive Officer Dr. Gamaliel Hassan noted that the industry is undergoing transformation adding that companies seeking to expand cannot simply tread water but must evolve to meet the changing needs of their customers.
“By building on the incredible momentum from the previous year, we maintain that embodying an ethos of valuing innovation, diversification and strategic alliances will push us closer towards achieving our 2019-2024 strategic initiatives,” said Dr. Hassan.
As a result of this good performance, the Sacco achieved surplus of Kshs. 1.43 billion in the year 2021 compared to Kshs. 1.03 billion in the year 2020.
“In spite of the challenges we have experienced, I am personally pleased by our performance in the year 2021 and expect better performance in 2022 as we evolve in the new world order impacted by the COVID-19 pandemic,” said the National Chairperson Mrs. Rebecca Miano.
She noted that the economy is projected to shrug off all the challenges and grow by 5.4 percent this year. “This growth will be supported by a stable macro-economic environment and sustained government efforts on vaccination across the country which will lead to further opening of the economy. Inflation is projected to remain within the Central Bank of Kenya’s target range of 2.5% to 7.5% this year.
The same vaccination efforts have been witnessed across the globe, further de-escalating the supply pressure on imports and other essential services globally, leading to a significant reduction of prices,” noted Ms Miano.
Commenting on the pandemic and its effects, the Stima Sacco CEO said that in the last two years, the Sacco has stayed on high alert expecting the unexpected. This mindset, he says, has allowed the Sacco to remain unfazed by the ongoing stops and starts brought on by COVID 19 and made Stima Sacco a more resilient and agile organization.
“The common denominator for all our achievements and growth has been the team’s underlying strength, which has led us to spot the opportunities that are in every new challenge. It has been a time for innovation and finding new and better ways to support our customers,” he added.
Dividends and interest rebate…
Following the exceptional results, the Board of Directors recommended the payment of a first and final dividend of 14 percent per share on fully paid-up shares as of December 31, 2021. Interest rebates on members’ deposits were pegged at the rate of 10.75 % for the year under review.
“The total pay-out for the two items will be Kshs. 2.99 billion in 2021 compared to Kshs. 2.72 billion in 2020. The Board is aware of the rapidly changing business landscape that has been necessitated by Covid 19, changes in micro-economics as well as the regulatory and legislative arena. However, Stima DT Sacco is committed to continuously improve shareholders’ returns as well as ensuring sustainable business growth,” announced Mrs. Miano at the AGM.
She added that the board’s commitment to continuous improvement through rigorous review of members’ growth and retention strategies that are mutually beneficial to all stakeholders cannot be underscored.
“We were elected to office in 2021 to serve members with diligence and commitment. As part of the leadership of the Sacco, we are expected to discharge our duties with commitment and dedication while upholding the highest levels of integrity. The Board and Supervisory Committee have developed an excellent working formula that allows each organ to discharge its unique duties. This relationship has allowed both the Board and Supervisory Committee to function and discharge their mandate,” said the National Chairperson in her speech to delegates.
In the year under review, the Sacco was privileged with the honour of being accorded a bevy of awards. Stima Sacco was recognized as the ‘Most Preferred Sacco in Automotive Asset Finance’ during the Automotive Industry Awards, ‘Best Sacco in Land Title Based Finance’ at the Real Estate Excellence Awards and Distinguished as the ‘Sacco of the Year’ during the Mombasa Business Awards.
Further, in the same year, Stima Sacco received the Bronze Mark at the CIO100 Awards, under the ‘Sacco Sector in the Use of Technology’ category, while Stima Sacco Chief Executive Officer (CEO), Dr. Gamaliel Hassan, was named as one of Kenya’s 100 Most Influential Muslims, by the Muslim Media. The National Chair, was also recognised, as the ‘Woman Chairperson of the Year’ at the inaugural Women on Boards Network Awards.
“We have over the years relied on our Staff to deliver and exceed our members’ expectations. The Board has been building capacity of our human capital to be able to deliver as per our strategic plan 2019 – 2024. As you all know, human capital is the greatest resource an organization can have and keeping it at par with the developments in the industry is fundamental to the success of our Sacco,” remarked the National Chairperson, adding that it is through the efforts of the Staff as well as the Board and members that the Sacco had grown over the years.
“We have over the years built capacity within the Management team to be able to effectively deliver on our strategy and we are optimistic that we shall witness tremendous growth and increase on the Sacco’s bottom-line,” said Mrs. Miano.
Mrs. Miano reported that the implementation of the Sacco’s 2019- 2024 strategic plan which kicked off in the year 2020 is on course, having already completed two years.
“The strategic plan is stratified under several pillars and enablers with a view towards maximizing member value. This stratification is meant to direct efforts in those critical areas.
Our focus has been on key drivers of the strategy such as mobile banking, agency banking and physical branch network as well as diversification of income streams through strategic partnerships and delivery of alternative business channels such as Shariah banking and insurance,” she noted adding that the Board and Management have and will continuously work together to deliver value to stakeholders and shareholders.
In the year under review, according to Dr. Gamaliel Hassan, the Sacco launched its Agency Banking initiative, dubbed Stima Sacco Mlangoni, in and around areas that have the Sacco’s footprint via its Strategic Business Units.
This initiative, he says will not only bring services closer to members, but also comes with the benefits of service availability, thereby improving financial inclusion and ensuring a wider customer base.
In addition to agency banking, all members of the Sacco can now walk into any branch and walk out with a Saccolink Visa-branded ATM card in minutes. The M-Pawa app has also been updated to enable faster and easier access to members’ accounts.
The Society, the CEO added, has also introduced cheque truncation into its operations, with the aim of improving efficiency in interbank transfers, and therefore speeding up member transactions. The Sacco also launched its seamless salary processing solution dubbed ‘Salo Chap Chap’, that aims at ensuring members receive their salaries, allowances, and pension payments in a timely and efficient manner.
The Sacco in addition re-introduced the Pesalink service to facilitate inter-person inter-bank transfers, and the Sacco is working on finalizing its direct debit process, an arrangement that will enable the Sacco to debit members’ bank accounts on agreed dates, for the purpose of facilitating loan repayments and savings contributions.
“As a customer centric organization, it is our constant hope that these advancements reflect our abiding objective to continuously respond to our members’ needs in diverse and innovative ways,” remarked Dr. Hassan.
Shariah Compliant Products…
Dr. Gamaliel Hassan noted that the deployment of the Shariah compliant product line was finalized in the year under review. The Society, now has the full range of Shariah compliant investment accounts and financing products available under the Yasar banner.
“Yasar is a word derived from Arabic, that means wealth or prosperity – and that is what the Society is aiming for its members. Launching Shariah compliant products and services supports Stima DT Sacco’s strategic objectives and goals towards mobilisation of savings and ensuring members access financing at fair and reasonable rates,’ explained the CEO.
Dr. Gamaliel Hassan went on to announce that the Sacco is a member of the Kenya Mortgage Refinance Company (KMRC), whose mandate is to increase the availability and affordability of home loans to Kenyans.
“The product was launched last year, and we commenced the lending of low-cost mortgages at interest rates between 9 – 9.5% with tenors of up to 25 years. The success of this project will position us strategically, both locally and internationally,” he said.
While acknowledging the current macro-environmental climate and the business disruption brought about by the COVID-19 pandemic, Ms. Miano connotes that the future of the Sacco is very promising.
“We are confident that with improved operations, customer service processes, the up scaling of the core banking system and focus on technology, we shall see exponential growth and agility in serving our members. The future, albeit challenging looks bright for us all. We remain confident and look forward to a promising year 2022,” she concludes.