With more than 73,000 members, Harambee Sacco ranks as one of the three biggest societies in Kenya in terms of member deposits.
Its membership is hugely drawn from the military, National Police Service, National Youth Service, national and county governments, parastatals and departments and constitutional bodies.
However, the Sacco has in the past hit headlines due to mismanagement and fraud.
Dr George Ochiri, a former chief executive of Safaricom Sacco, took over leadership of the Harambee Sacco over a year ago, promising to clean up the mess. He talked to Financial Standard on the journey.
When you assumed office, you set out to “reclaim the lost glory” of Harambee Sacco. How has the journey been?
When I came here, this place was in semi-chaos. There had been a vacuum in most key offices and members were always complaining. This was once a revered place, but that had been lost. The first thing I did was tighten financial controls, build capacity and deepen automation.
We used to have money disappearing openly, but not anymore. We’ve enhanced this through reconciliation daily because our over 73,000 members transact huge sums of money daily whether through phones, ATMs or over the counter.
What have you achieved?
We’ve also adopted a new auditing software and deepened IT where we have an independent cyber-crime partner, who oversees our network.
In your turnaround strategy, you also talked about staff rationalisation. How many have you let go of?
The staff I found here have over the years acquired the behaviour of government working culture. Compounded with age, the average age of our staff was 48 years, which I set out to reduce.
According to management principles, the moment somebody hits 40 they stop being interested in their work and are just concerned about their security, so they just do the minimum to secure themselves.
The best output is given by workers aged between 20-35 years. Late last year and early this year we gave a chance to any staff member whose age was between 40 and 57 to voluntarily retire. We spent about Sh90 million in the process and 15 members took advantage of the early retirement.
We were hoping to bring in more to fill up their space but the Covid-19 pandemic has slowed down the process and we didn’t bring out the young people we wanted.
Some of your members were also alleged to have participated in fraud before you came in. How deep-rooted was the vice?
Harambee Sacco had in the past been a centre of fraud. I normally put it jokingly that when we are done, we need a museum here so that no other society should go through what Harambee has faced. Any fraud that can be done to a financial institution has happened here.
There were cases of impersonation mostly for servicemen who were on faraway assignments. Signatures for loan guarantors were also being forged rampantly.
We also have a small compensation package for bereaved members. People used to purport to have deceased relatives and claim compensation.
Members would come and claim that they had dead relatives. We’ve now fool proofed our systems through IT and any fraud is near impossible.
Guarantors are confirmed through SMSs and we require concrete evidence on dead family members.
How has the Covid-19 pandemic impacted Harambee Sacco?
The impact has been very minimal on our operations. We happen to be serving mostly civil servants and the government has not laid off or stopped paying salaries.
Our operations have been near normal. We expect the best growth in Harambee this year. As of the end of May, we had already grown our revenue by 23 per cent this financial year.
We are looking to grow the whole society by over 15 per cent this year. We are almost sure to close our balance sheet at Sh34 billion, coming from Sh29 billion.
What about financials?
The Sacco posted a Sh100 million profit for the financial year ending December 2019 with the profit growing 85.7 per cent from Sh53 million in 2018. The Sacco has excess liquidity and is targeting new ventures, including mortgage financing.