1. 6/7/2016 GEORGE OTOTO, MANAGING DIRECTOR, KUSCCO LTD., TEL: +254-020-27100784, 0722-386469, www.kuscco.com E-MAIL: goto@kuscco.com/info@kuscco.com

2. ADOPTING THE SAVINGS CULTURE THROUGH THE CO- OPERATIVE MODEL

3. Preamble: Main Focus of any SACCO Society or Credit Union world over is mobilization of savings, the availability of credit and the general improvements of the standard of living of members. Main Focus of any SACCO Society or Credit Union world over is mobilization of savings, the availability of credit and the general improvements of the standard of living of members. Most SACCO Societies by-laws state that their objectives are “to promote thrift amongst its members by affording an opportunity for accumulating their savings and in so doing create a source of funds from which loans can be available to them exclusively for provident and productive purposes at fair and reasonable rates of interest, thereby enabling them to use and control their money for mutual benefit.” Most SACCO Societies by-laws state that their objectives are “to promote thrift amongst its members by affording an opportunity for accumulating their savings and in so doing create a source of funds from which loans can be available to them exclusively for provident and productive purposes at fair and reasonable rates of interest, thereby enabling them to use and control their money for mutual benefit.”

4. Definition: Savings What is Savings? – It is the process of keeping aside or preserving for future use. It could also be viewed as earnings accruing from past thrift or effort. It is the process of keeping aside or preserving for future use. It could also be viewed as earnings accruing from past thrift or effort. 4

5. Savings Culture: What do we need to do? Provision of education on managing personal finance and making sure people have the advice and support they need as they go through life. Provision of education on managing personal finance and making sure people have the advice and support they need as they go through life. 5

6. 6 AFRICA – (WOCCU MEMBERS) AFRICA – (WOCCU MEMBERS) USD USD Cameroon 207.6 Million Gambia 12.1 Million Ghana 113.8 Million Kenya 2.53 Billion Malawi 16. 9 Million Seychelles 11. 1 Million South Africa 14.6 Million (Source : WOCCU 2011)

7. 7 Savings mobilization strategies … Continuously reviewing the minimum share contribution per member per month to cushion the inflationary trends through a percentage, say 10% or by a specific minimum. This means that if the current contribution was for instance USD 10 the same could be raised to US$12.5 or US$15 or as may be appropriate to the membership. Continuously reviewing the minimum share contribution per member per month to cushion the inflationary trends through a percentage, say 10% or by a specific minimum. This means that if the current contribution was for instance USD 10 the same could be raised to US$12.5 or US$15 or as may be appropriate to the membership. Pegging the loans granted to the minimum shareholding. This means that the bigger the loan Pegging the loans granted to the minimum shareholding. This means that the bigger the loan

8. 8 a member obtains from the SACCO Society the higher should be the minimum savings. a member obtains from the SACCO Society the higher should be the minimum savings. Basing the minimum share contribution as a percentage of the salary or graduating the minimum share contribution according to the job groups of the members. This makes contributions equitable. Basing the minimum share contribution as a percentage of the salary or graduating the minimum share contribution according to the job groups of the members. This makes contributions equitable. Varied interest rates on development loans and education loans being lower versus emergency loans and re- finance loans, being higher Varied interest rates on development loans and education loans being lower versus emergency loans and re- finance loans, being higher

9. 9 individual/members/clients improve productivity and incomes. Setting interest rates that are friendly to both the borrower and the saver; Setting interest rates that are friendly to both the borrower and the saver; Providing efficient and effective services pegged on the clients convenience in terms of place, time, quantity and quality; Providing efficient and effective services pegged on the clients convenience in terms of place, time, quantity and quality; Continuously assessing the needs of the members/clients to upgrade the products and services. Continuously assessing the needs of the members/clients to upgrade the products and services.

10. 10 The Front Office Services (FOSA)– SASA Account is now the most appropriate strategy for savings mobilization through:- The Front Office Services (FOSA)– SASA Account is now the most appropriate strategy for savings mobilization through:- Current Accounts- School Fees Accounts Current Accounts- School Fees Accounts Children Accounts- Christmas Accounts Children Accounts- Christmas Accounts Deposit Accounts - Home Improvement Loans Deposit Accounts - Home Improvement Loans Mortgage Accounts - Retirement Deposit Accounts Mortgage Accounts - Retirement Deposit Accounts - Advances/Overdrafts - Payroll deductions Bicycle Loans Savings - Safe Custody Services Bicycle Loans Savings - Safe Custody Services Medical Accounts Medical Accounts

11. 11 For the successful implementation of the process, SACCOs may be encouraged to save part of deposited money/Accrued interest with their apex bodies through the Central Finance Programmes with a view of multiplying available funds for onward lending to members/clients. For the successful implementation of the process, SACCOs may be encouraged to save part of deposited money/Accrued interest with their apex bodies through the Central Finance Programmes with a view of multiplying available funds for onward lending to members/clients. Publicity about the organization’s existence and awareness creation on products and services on offer; Tell the public through the print media features, who you are, what you are/have been doing and what others can benefit from you; Publicity about the organization’s existence and awareness creation on products and services on offer; Tell the public through the print media features, who you are, what you are/have been doing and what others can benefit from you; Encourage tours and visits to other savings and credit Encourage tours and visits to other savings and credit

12. Co-operatives already in front office services; Introduce competitive awards to highest savers e.g. trophies, certificates or cash awards; Introduce competitive awards to highest savers e.g. trophies, certificates or cash awards; Personal contact with hesitant potential clients should be enhanced. Personal contact with hesitant potential clients should be enhanced.

13. 13 In conclusion, to enhance mobilization of savings and in turn attract and retain the members, the following are recommended:- In conclusion, to enhance mobilization of savings and in turn attract and retain the members, the following are recommended:- 1. Effective management through provision of efficient and quality services to the members. This should be through intensive training of the management, sound financial management and instituting a system of checks and balances; 2. Prudent investments in areas that would bring adequate return to the members. The investment must help sustain the Primary objective of the SACCO

14. 14 Society. Society. 3. The SACCOs must strive to encourage deposits by members by paying good interest on members deposits and dividends to its members. This will put the Society in good competitive position. It is therefore the responsibility of the Board Members, Delegates, Management and Staff to play a public and customer relations role by portraying a good image of the SACCO Society. This will help attract and retain the membership of the Society and in turn the much needed savings. It is therefore the responsibility of the Board Members, Delegates, Management and Staff to play a public and customer relations role by portraying a good image of the SACCO Society. This will help attract and retain the membership of the Society and in turn the much needed savings.

15. 15 Way forward Being net savers and not net borrowers; Being net savers and not net borrowers; Lobby governments to provide tax incentives towards SACCO Savings; Lobby governments to provide tax incentives towards SACCO Savings; Employment of youths in productive economic activities; Employment of youths in productive economic activities; Government to enact enabling legislations to restore public confidence and influence growth of SACCOs; Government to enact enabling legislations to restore public confidence and influence growth of SACCOs; Introduction of farm subsidy/agriculture improvement funds. Introduction of farm subsidy/agriculture improvement funds.

16. THANK YOU ? & A