Safaricom Sacco striving to be the financial services partner of choice

Established in May 2001, Safaricom Sacco has been on the forefront to be a prudential financial ally by offering products and services that both assist members in terms of needs as well as offer savings and investments. For the last seventeen years, through dedication, innovation and good governance, Safaricom Sacco has made a mark and is now fronted as one of the most successful institutions catering to the IT subsector. Corporate Watch Magazine’s Ker Mogallo had a chat with the institution’s CEO; the man behind the triumph of the Sacco and files the following report.

‘I joined Safaricom Sacco in may 2011 at a time when the institution had quite a number of challenges as commercial banks were lending at an interest rate of 10% and Safaricom Limited shares were selling at Sh 2.30 and most members were withdrawing because of the dissatisfaction and the better option the banks were offering at that time. My immediate assignment was to reverse this and ensure they stayed and to grow the Sacco,’ says Dr. George Ochiri (Phd), the Safaricom Sacco Chief Executive Officer.

To keep the Sacco afloat, Dr. Ochiri steered the opening of the common bond and rolled out a marketing strategy mapping organizations doing business with Safaricom Limited. By doing this, the Sacco swallowed other smaller Cooperatives in the subsector in a members’ recruitment drive, immediately doubling members. According to the CEO, in 2011 when he joined, the membership was at 2000, in 2013, it stood at 5000 and currently, Safaricom Sacco has a membership of 12,000.

On assets, the institution has recorded phenomenal growth over the last seven years with an asset base of 600 million in 2011 and now standing at 5.4 billion in April 2018 according to a report from the institution’s AGM presented to members.

After establishment of the FOSA at the Sacco in 2011, the sector regulator SASRA ranked the SACCO 56^th in asset size countrywide in 2012 marking the beginning of a new push to further excel. In the year 2013, the Sacco ranked 43^rd and then to position 34 in 2014.

‘ We did not stop in our quest to be the best, in the year 2016, the regulator ranked us 23rd and our target now is to be on the list of top ten most efficient Sacco’s by 2019,’ said Dr. Ochiri in an interview at the Sacco offices.

He went on to add that under his stewardship, the staff too has grown in number and on service delivery.

‘I began with 11 members of staff, now I have an efficient and dedicated staff of over twenty nine with a regional reach,’ he said.

The Sacco, in 2014 upgraded its ERP system that now is able to compete with any system in the entire banking sector. With the technical advancements and coming up of digital lenders that are its main competitors, the Sacco has invested on an online portal that is a self-service platform for members. The platform allows for borrowing of short-term loans such as the ‘Rununu’ and the ‘Kona’.

The Sacco aims to do away with paper work and go fully digital by the year 2020. To kick off this, the Sacco from 2016 stopped the disbursement of dividends to members by staff. Its web portal has been designed to enable the automation of dividend payments to members.

‘We no longer process dividends for members; they now log on to the online portal and pay themselves. This year, by day three over 5000 members had paid themselves through the portal,’ said the CEO.

At this year’s AGM however, the members gave the management and the board the mandate to ensure an increase in the institutional capital ratio. This year, the Sacco gave a return on rebate of 9percent; whilst the members want a double digit of 10 and above within the next three years.

The CEO who has been in the Sacco industry for eighteen years says the regulatory system of the Sacco is better now and has catapulted the growth of Safaricom Sacco. He however notes that the tax regime is not favorable to Saccos as there is a tax waiver for mortgage financing companies while Saccos do not get a tax waiver when they finance mortgages, he also notes that on housing and mortgage long term loans are available to banks, the same is not available to saccos whilst the Sacco sector is better placed to provide these home loans facilities.

Dr. Ochiri further explains that there are already indications that the environment will be made more favorable for Saccos by the government and hopes these come in to play soon for the benefit of the Sacco sector.

The man at the helm of the Sacco’s operations says the institution has leveraged on technology and good governance to ensure it is the financial services partner of choice.

‘Technology makes things standardized and faster; there is also a good relationship between the staff, the board and members creating an ecosystem of trust. The Safaricom Sacco working environment provides the motivation to do things right so, the temptation to interfere or squander people’s money is out thus theres no corruption and no room for loss of people’s money,’ Dr. Ochiri asserted.

The Sacco has embarked on a journey to craft a mortgage product, as this is a main demand by the members. On a short term, the Sacco is set to boost and enhance its IT systems to curb cyber attacks.

In the year 2016, the Sacco was nearly penetrated by cyber criminals prompting the Sacco to further invest in a more secure IT system. The Sacco has contracted Safaricom Limited as its digital watchdog thus its secure infrastructure. The Sacco has also invested on a server in the cloud and assures its members of safety from cyber crime.

The supply Chain Management Phd holder prides himself in the turning around of the Sacco and steering its growth nine folds. Passionate about investments and investment opportunities, the CPA (K) holder says despite the strides made, the Sacco sector needs more funding opportunities, better governance, fair pay of staff, a better regulatory frame work among others to steady the cooperatives sector.

‘We want the best for our members, our board and staff are highly qualified and diversified this gives us an upper hand and puts the Sacco in a good position to offer quality services,’ said Dr. Ochiri.

Even with the turbulence in the financial sector, Dr. Ochiri says the Sacco sector is continuously growing and will soon outdo the commercial banks sector.

‘We are on the right path and soon, the commercial banks will feel the pinch,’ he concluded.