Harambee Records Growth as Total Assets Hit Ksh.34.62 billion
By Catherine Muema
Harambee DT Sacco Society has recorded a 187 percent rise in net surplus to Sh350 million on increased interest from members’ deposit in the year ended December 2021.
This growth tabled before its Annual Delegates Meeting held on the 14th February 2022 is unmatched in the history of the Sacco and is attributed to product differentiation, innovation and aggressive marketing that catalyzed an increase in the patronage of the society’s products and services. Moreover, the Sacco recorded improved operational efficiencies and cost control.
According to Harambee DT Sacco National Chairman Mr. Macloud Malonza, the society was at its best during the period in review in terms of performance shuttering its revenue generation history with an all-time high collection despite the mutations of the Covid-19, and the new challenges presented by the new variants.
The Sacco announced a record high collection of Sh4.2 billion in 2021. The revenue saw a Sh1 billion growth from Sh3.2 billion the previous year.
“Harambee DT Sacco remains steadfast in its commitment to grow and maximise shareholders’ wealth through a resilient business model. The board is putting systems in place that will ensure this growth trajectory is not only sustained but improved through the deployment of a robust resilient strategy,” noted the National Chairman Mr. Malonza.
Interest from members’ deposits rose from Sh1.1 billion to Sh1.44 billion. During the review period, deposits and savings grew by 5 percent to Sh22.54 billion.
Interest on bank loans grew by 40 percent to Sh401 million while salaries paid fell by Sh3.7 million from Sh167.5 million.
Loan Book Growth…
Although the society recorded significant growth on its loan book, members appetite for loans rose too. In the year under review members’ loans and advances went up by 11% equivalent to Ksh 2.508 billion.
Total assets increased by Ksh 2.06 billion from Ksh 32.56 Billion recorded in the year 2020 to Ksh 34.62 billion in the year 2021 representing a growth rate of 6%. This increase is attributed to growth of the loan book.
“We believe the society can do better in this area and it, therefore, will be one of our key growth strategies going forward.” he continued.
Harambee Sacco Chief Executive Officer Dr. George Ochiri, MBS while commenting on the Sacco’s achievements noted that like the proverbial staircase, the transformation journey began in 2019 on the thematic pedestal ‘Reclaiming The Lost Glory; then moved a step higher in 2020 on the theme ‘ The Harambee We Want’ before climbing even higher in 2021 on the theme ‘ Transformation For Better’.
“I must confess that our journey of a thousand miles has been one memorable tour. Our aspiration has been to build on the lessons learnt in the past three years while paying attention to four key pillars namely; the member focus, financial stewardship, polishing our processes and entrenching learning and growth in the society which have borne great fruits,” remarked Dr. Ochiri.
The Chief Executive Officer added that in the wake of the whirlwind speed with which digitization has been evolving, the society will endeavor to model strategies that embrace digitalization while putting in place high end cybercrime security systems and policies that will ensure a round-the-clock safety of members’ funds.
Speaking at the ADM, Principal Secretary State Department for Cooperatives Mr. Ali Noor Ismail, lauded the Sacco for investing in technology to address cybersecurity issues. He said several projects are underway to enhance Saccos’ performance, including the operationalization of the Deposit Guarantee Fund, which will help cushion members’ deposits should they fail.
Credit information sharing, the PS said, will also help Saccos avoid pitfalls that come with perennial defaults, promising that provisions of the Data Protection Act will not be contravened.
The Chairman, Mr. Malonza said the Sacco was moving to protect members’ deposits to increase confidence in those joining Saccos. He said the Sacco is prepared to enroll in a payment system to leverage economies of scale.
According to Mr. Charles Konzolo the Chairman of the Finance, Staff and Administration Committee and also National Treasurer Harambee Sacco, Information Communication Technology remains a key driver of the Sacco’s business. He noted that Harambee Sacco had achieved greater milestones by harnessing technology.
“As at December 2021, 86% of our members had subscribed to use the new short Code mobile banking platform (*357#) dubbed Harambee m-Cash, a code which is fully owned by Harambee DT Sacco thus increasing service efficiency and reduced interruptions,” Said Mr. Konzolo.
The national treasurer added that the portfolio of the Sacco’s online products and services continues to grow with the sacco introducing two loan products; Inuka 84 and Inuka 72 loans during the year under review. The two loan products offer loans with a maximum online limit of up to Ksh 1 million.
‘The mobile banking platform has been made user friendly and seamless. D uring the year 2021, the Sacco issued 164,946 online loans worth Ksh. 3, 920, 202, 393 representing 18% of the total loans issued in 2021,’ remarked Mr. Konzolo.
Now and beyond…
Harambee DT Sacco currently has a membership of 74,274 and assets worth 34.6 billion as of December 31, 2021. “Loans and advances to members stood at Sh24.4 billion up from Sh21.9 billion in 2020, and members deposits and savings grew to Sh22.5 billion. I urge you to adhere to statutory requirements on prudential ratios as outlined by Sacco Societies Regulatory Authority,” said Ismail.
In 2021, the Sacco, which plans to launch business loans next month, had 14 agencies. Today, with over Kshs. 32.5 Billion in assets, Harambee DT SACCO is feted among the largest societies in Kenya and uses its assets to empower members to live with dignity and accomplishment throughout their lives.
Being the second year of the Sacco’s 2021- 2025 Strategic Plan, the society is keen to build on the existing lessons and laurels moving forward. A key thematic pillar in 2022 is institutional strengthening and specifically on the area of balance sheet restructuring with a focus on ensuring that the Sacco’s non-earning assets ration stands at 18.3.
The Sacco will also focus on deepening digitalization- moving more services online thus ensuring that while the Sacco will not ignore the brick and mortar model, it shall enhance services on the mobile and e-platforms to ensure 90% and above up-take on services online.