By Co-op News
Dumisha Sacco membership decreased by 18.5 per cent, with the shrinkage attributed to adverse effects of the Covid-19 pandemic, retirement, death, and cutthroat competition. However, the Sacco recruited over 300 members in the financial year ended 2020 December.
On a positive note, the Sacco had a growth of 8.8 per cent on total assets and a 7.6 per cent increase on loans to members.
The external borrowing shot up by 78.8 per cent to hit Ksh 65.6 million, while members’ deposits slightly increased by 1.8 per cent to Ksh 154 million, as members leaving the Sacco withdrew their money.
Charles Leorto, the Sacco chairman, said the Board was keen to grow savings to offer credit facilities more efficiently. However, he noted that the growth in the loan portfolio is a result of funds availability.
The Sacco expenditures grew by 6.5 per cent due to the related cost of borrowing the new loan.
“The Board will continue to institute measures to manage costs and ensure returns to members and healthy growth in the Society’s capital reserves,” he said.
Last year, the Society experienced reduced loan repayments caused mainly by the closure of business and members losing their jobs, pushing its total non-performing loans as a percentage of the gross loan portfolio to 10.6 per cent.
“The staff have closely monitored loans and kept close interaction with loanees to understand the challenges members were facing. The Board will continuously enhance operational capacity of the credit function to ensure effective management of loans which form the bulk of the Society’s assets,” said Mr Leorto.
The Sacco is also planning to outsource debt collection services to recover defaulted loans.
According to the chairman, the Sacco intends to leverage technology to grow business with mobile banking application in the offing.
