Metropolitan Sacco puts aside Sh6.7 billion as bad loans surge

In other changes approved by members, the Sacco will go after serial defaulters, cut costs, and overhaul its governance structure to meet legal requirements and reflect the diversity of its membership.

Civil servants

This as the Sacco, which draws its membership from teachers and civil servants, seeks to bounce back from a tough environment aggravated by the Covid-19 pandemic.

Members with big loans are also expected to contribute more in the new changes, with Mr Karanja regretting that there have been cases of people with loans of up to Sh2 million contributing a monthly minimum of Sh3,000.

The Sacco will also have a new board and chairperson after members approved proposals to have board members who retire from active service automatically retire from the board.

The chairperson, vice-chairperson, treasurer and secretary-general are also to serve for only two terms of three years each. Other changes include the introduction of a delegates’ system to devolve representation closer to the people.

“The benefit of this system is that members will be able to elect local representatives who will air their issues to the board and ensure a more responsive governance of the Sacco,” said the chairman.

Sacco’s share capital has been raised from Sh10,000 to Sh20,000. Sacco CEO Mr Benson Mwangi said things are looking up after members who defaulted on the repayment of their loans due to the Covid-19 pandemic started making steady payments.

Because the Sacco has paid out a lot of money for these loans, it means that members will not be getting their dividends or honour the member refunds until the loans are repaid.

Members also endorsed a proposal for the closure of marketing offices and branches found to be unprofitable, leading to a reduction in the staff count.

After undertaking a review and fit-gap analysis on the ICT system, which was said to be weak, the Sacco has come up with a new ICT roadmap, which it hopes will make its services more efficient.

The changes are meant to help achieve liquidity management, deposits mobilisation, loan book rationalisation, operational efficiency and build-up of institution capital. Saccos’ performance this year has improved as the economy eased out of the Covid-19 pandemic.

With over 100,000 members, the deposit-taking Sacco draws its membership from the Teachers Service Commission, ministries, parastatals, Kenya Defence Forces, National Police Service, public and private universities, colleges, academies and the private sector.

It is the sixth-largest Sacco in the country with an asset base of Sh14.8 billion.