Shariah-compliant Taqwa Sacco scales up operations after clinching deposit-taking license

Taqwa Sacco Chairman Dr Ahmed Yussuf (left) with Cabinet Secretary for Industry, Trade and Cooperatives Adan Mohamed during the launch of the Sacco’s Front Office Service Activity (FOSA) on Wednesday in Nairobi. Looking on is Principal Secretary of Cooperative Development Ali Noor Ismail and his Lands Counterpart Mariam El Maawy.

NAIROBI: The first Savings and Credit Cooperative (Sacco) based on Islamic interest-free principles is scaling up its operations after being licensed to take deposits and offer banking services.

The Shariah-compliant Sacco, with Sh400 million in deposits, joins 175 others licensed by the Sacco Societies Regulatory Authority (Sasra) to offer Front Office Service Activity (FOSA).

The Sacco’s Board Chair Dr. Ahmed Yussuf, was upbeat about attracting more Kenyans to the financial institution by rolling out new services such as cash deposits, withdrawals, operating savings and current accounts, Automated Teller Machine (ATM) services, mobile banking and money transfer.

“Now that the Sacco is licensed to offer front office services, we are in a better position to serve the financial needs of its members with more products and services and reach the large numbers of Kenyans with limited access to financial services,” he said.

Dr Yussuf said the Sacco is keen to entice the large unbanked population in the country to grow its financial muscle. It has a loan book of Sh372 million as at end of December 2016. The Sacco is also expected to increase its branch footprint across the country to reach more Kenyans.

The Sacco has been operating for the last 19 years, offering back office services such as check-off loans. Its membership of 4200 was mainly from government ministries, parastatals, NGOs and the private sector.

Dr Yussuf said with its new array of services and products, the Sacco does not target only members of the Muslim community but  all Kenyans keen to avoid interest(usury) in financial products and transactions irrespective of their religious affiliation. The Sacco has rebranded as it seek to attract deposits from Kenyans.

“The Sacco was initially founded to meet the needs of the Muslim Community but we have expanded beyond that to serve all Kenyans,” he said.

There are three other Saccos offering interest-free financial products in Kenya but Taqwa Sacco is the only one licensed to take deposits.

Commenting on the new status of Taqwa Sacco, Cabinet Secretary for Industry, Trade and Cooperatives Adan Mohamed said the institution should focus on enhancing financial inclusion for many Kenyans who are unable to access finances to lift their living standards.

“The Sacco should be at the forefront of offering innovative products to reach Kenyans who have been left out of the current financial system, including those in Northern Kenya,” he said.

He said the government is committed to creating the right legal and regulatory environment to enable Sacco’s go thrive in Kenya.