Chai Sacco earnings up on the back of increased borrowing

Kenya: Chai Sacco has recorded a 29 per cent growth to reach Sh1.98 billion for the year ended December 31, 2014, up from Sh1.53 billion recorded in the previous year.

The Sacco’s profit rose to Sh36.4 million, compared to Sh29 million in the previous period. Revenue increased by 23.4 per cent, propelled by growth in loans that went up 28 per cent to reach Sh1.7 billion, due to improved service delivery, growth of share capital and increase its membership.

Speaking at the Sacco’s 42nd annual delegates meeting recently, Chief Executive Purity Maina said member deposits grew by 16 per cent to close at Sh1.4 billion from Sh1.2 billion recorded in 2013. “This growth in membership deposits has been linked to the Share capital mobilisation, which was launched in mid-November, she said. “Total asset grew by 29.2 per cent to stand at Sh1.98 billion from Sh1.53 billion, as the Sacco grew by 29 per cent compared to 19.1 per cent the previous year.”

Total Revenue increased by 23.4 per cent - from Sh214 million to Sh264 million while member deposits grew to Sh1.4 million from Sh1.2 million reported in 2013. Rebates payable to members based on their deposits maintained at six per cent as the dividends based on share capital stands at 10 per cent. Loan to members grew by 28 per cent to Sh1.77 billion, from Sh1.38 billion. Ms Maina linked the Sacco’s growth to a couple of factors including growth in member deposits and an increased appetite in loans by the members.

Ms Maina said the five-year strategy played a key role in the Sacco’s sustainable growth, including the expansion of the branch network, growth of the share capital and provision of tailored products and services.

“From a deeper analysis of our performance, I am glad to highlight the growth in membership deposits as clear evidence that through our various financial trainings, our members have been able to counter various financial burdens through well-tailored financial goals, enabling them to save beyond the minimum,” said Sacco Chairman Boniface Ayub.

Loans disbursed

Mr Ayub said improved personal debt management by members led to the 28 per cent jump in loans disbursed, up from the Sh1.38 billion reported in 2013. “This is a clear indicator that they effectively utilised the available products and services offered to grow themselves and their businesses,” noted Ayub

“We found out by training our members in investment skills and helping them identify the best opportunities lead to sustainable borrowing and usage, which in turn will lead to revenue growth for the Sacco,” Maina said. Late last year, Chai Sacco launched a share capital drive to raise 500 million, which will see it set up nine branches and over 20 marketing offices.