Saccos pays dividends at 15%, and Total Assets grow by 14.5% to Ksh13.47 billion.
Mentor Sacco’s digitization of service delivery and adoption of a people-centred business model has accelerated its growth in the past year while keeping the institution strong and stable amidst an economic lull.
The Sacco reported impressive financial results driven by its management focus on members’ needs and increased members’ patronage of products and services.
It set a new standard in the financial industry with its remarkable success in the Financial Year that ended on 31st December 2023. The Sacco’s commitment to delivering exceptional services through a tech-led approach while ensuring its members remain at the centre of its business model places it ahead of the curve.
Despite the economic downturn, the Sacco registered an upward trajectory thanks to its unwavering focus on meeting the needs of its members.
With an astounding Ksh1.183 billion paid out in dividends and rebates, it is evident that the Sacco’s management is dedicated to adding value to its members’ lives. The payment was a 16.5% increase from the previous year.
“By patronizing the Society’s products and services, members have played a crucial role in the Sacco’s growth and success. The Board recommends payment of interest on non-withdrawable deposits at a rate of 12.4% and dividend on share capital at 15%,” said Mr Anthony Kamau, Sacco Board of Directors Chairman.
The Sacco’s overall improved performance saw its total revenue grow from Ksh1.54 billion in 2022 to Ksh 1.83 billion in 2023.
Loans and advances that account for over 80% of the Sacco’s business increased marginally by 12%, expanding the loan book to Ksh9.86 billion in 2023. During the year, the Sacco granted loans and advances with Ksh8.15 billion. However, the loan uptake slowed down compared to the previous year when the Sacco reported a 16% growth in loan disbursement, pointing to economic distress and reduced household incomes.
Nonetheless, Mentor Sacco continued to provide credit to its members by offering quality products and services at a competitive rate to enhance their economic and social growth.
Membership increased by 22.5% to about 40,000 active members as the Sacco continued to make gains in Kiambu county, where it has attracted over 3,000 new members.
The Sacco’s innovation and good reputation anchored the growth of its members’ deposits and savings, which leapt by 14.5% to Ksh over 10.2 billion at the close of the financial year. Mr Kamau, speaking during the 47th Annual General Meeting, reported that members’ contributions through ordinary deposits, FOSA deposits and Mazao deposits, among others, continued to grow tremendously.
Total Assets surged by 14.5% to Ksh13.47 billion in 2023, up from Ksh 11.76 billion in 2022, further pushing the Sacco up the ladder of the country’s wealthiest co-operative societies. Earning assets increased 15.06% to Ksh12.08 billion, solidifying the Sacco’s financial muscle.
“In the year under review, Mentor Sacco’s financial stability improved and remained above the Deposit-Taking Sacco sub-sector average,” said Mr Kamau.
The Sacco’s financial stability was evident from its strong capital adequacy indicators that surpassed the Sacco Societies Regulatory Authority’s (SASRA) prescribed minimum standard. For instance, the Sacco’s liquid assets ratio increased from 131% in 2022 to 145.3% in 2023 against the prescribed minimum of 15%.
“The analysis shows that the Sacco held more members’ deposits in cash and cash equivalents as of 31st December 2023 than in a similar period in 2022. This clearly indicates the trust and confidence that members have in the Sacco,” said Mr Kamau. He said the management will diversify the Sacco’s investments including money markets and government bonds to grow income.
“We are investing more in technology to deliver quality and convenient services to our members everywhere. We are committed to being a paperless banking institution. This will enable us to attract more youth, who we are ready to mentor and support in their journey to financial independence,” said Mrs Joyce Ndegwa, Chief Executive Officer.
The Sacco is in the process of acquiring a robust ICT system to enhance customer experience.
She noted that the Sacco has developed a customer-centric approach and staff were ready to engage and listen to their concerns for assistance. “Those who have difficulties in loan repayment and come to us for advice, we always find a way out.”
Mr Paul Kimani Mugo, Murang’a County minister for Trade, Industrialization and Co-operatives, who was the chief guest, commended the Sacco for accelerating development in the region and operating within the law while upholding food governance.
Mentor Sacco’s innovative approach to service delivery is a testament to its commitment to excellence. Last year, the Society was recognized for its exemplary performance scooping top awards such as the best in risk management, best improved, best managed and highest returns to members during national and county Ushirika day celebrations.
Mentor Sacco’s 2024-2028 Strategic Plan aims to fortify its financial stability, foster community progress, and ensure its members’ prosperity.
“The Sacco is committed to prudent financial management, innovative solutions and member-centric initiatives,” said Mr Kamau.
Under the new growth plan, the Sacco is set to acquire a new core banking system to enhance efficiency in service delivery and ensure over 80% of products and services are accessed digitally. The Sacco Board plans to invest in more inappropriate ICT cyber security infrastructure to keep abreast of fast-changing technological advances.
By achieving these, the Sacco management targets to grow membership to over 80,000, increase revenue to over Ksh3 billion, expand loan book to Ksh14 billion, grow deposits to Ksh16.4 billion and increase share capital to Ksh1.5 billion by 2028.
The Board also intends to enhance the Sacco’s risk management to 100% in 2024 and beyond. “We thank our members for our success in 47 years,” said Mr Kamau.
