History of Saccos in Kenya

History of Saccos in KenyaA savings and denotation Coop successiontive is a type of joint whose objective is to pool nest egg for the members and in looseness provide them with confidence facilities (UN-HABITAT, 2010). The prevalent objective of SACCOs is to promote the economic interests and general welfargon of its members.The ICA Statement on the Co-operative Identity defines a cooperative as an autonomous association of persons united voluntarily to meet their common economic, social, and pagan needs and aspirations through a jointly owned and democratic on the wholey promiseled enterprise.Co-operatives argon based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. Co-operative members believe in the estimable values of h onenesssty, openness, social responsibility, and caring for others (Bibby Shaw, 2005).The 1995 ICA Congress in any case re gainu new-maded seven principles of co-operatives.In summary, they areVoluntary and o pen rank and fileDemocratic member controlMember economic participationAutonomy and independenceEducation, training and disciplineCo-operation among co-operativesConcern for the communityDifferent SACCOs provide a number of products which implicate but are not limited to denotation work, deposit and savings facility, cheque clearing, bankers cheques, standing orders, safe custody, and salary advances.History of SACCOsThe pioneers of modern cooperation emerged in working- class environments in European Industrial cities of the 19th Century. In the 1840s,the number one to industrialize countries (Great Britain and France),pioneers of co-operative invented models of the consumer cooperative and the labor cooperative to defend and promote the interests of working class families in the face of the social disasters caused by industrial revolution.The second propagation of the pioneers of modern cooperation emerged, in certain European folksy environments in the late 19th century. In the 1860s, these pioneers created the models of agricultural cooperatives and savings and credit cooperatives inspired by the success of the consumer cooperatives formula in Great Britain and based on superannuated traditions of rural solidarity layed to meet the primary economic needs, which went unsatisfied. Agricultural cooperatives then enabled families of farmers and ancestry chevvyrs to organize their own supply systems of agricultural inputs and trade their products and no long-lived depended on merchants and businessmen in the cities. The SACCOs helped them to stop depending on moneylenders and to find the credit necessary to modernize their agricultural cooperatives (Mwakajumilo, 2011) .SACCOs in AfricaIn Africa, the idea was brought by a Roman Catholic priest, in Jirapa, a town in Ghana, in 1955. Father John McNulty from Ireland had studied in Canada where he learnt just about savings and credit co-operative societies.Father McNulty helped the Jirapa vill get o nrs to form a savings and Credit Co-operative. The co-operative assisted the members to address their fiscal problems which they couldnt individually. Father McNulty trained about 60 pot, who were the first successful savings and credit co-operative pioneers on the African continent.The success of Jirapa savings and credit co-operative spread throughout Ghana and by 1968, the savings and credit co-operatives throughout the earth came together to form the Credit legal jointure of Ghana , which was set up to promote, organize, dish and co-ordinate the activities of savings and credit co-operative in Ghana. (Alila Obado, 1990).According to the World Council of Credit Unions (WOCCU) 2011 statistical report, there are51,013 credit unions in the world, having a total of 196,498,738 members and a total perceptiveness of 7.8% Penetration rate which is calculated by dividing the total number of report credit union members by the economically active population age 15-64 years old (Wor ld Council of Credit Unions (WOCCU) , 2012).The largest markets in Africa by number of members as of December 31st 2011 are Kenya (4,183,220), Senegal (2,231,117), Ivory Coast (1,705,712), and Benin (1,597,233) (WOCCU, 2012).History of SACCOs in KenyaSACCOs in Kenya are currently among the leading sources of the co-operative credit for socio-economic development (Alila Obado, 1990).cooperatives in Kenya were started in 1908 and membership was limited to white colonial settlers. The first cooperative was accomplished at Lumbwa, present day Kipkelion area. In 1944 colonial officers allowed Africans to form and join cooperatives (Gamba Komo, 2012).The initial attempt to encourage African farming co-operatives was initiated by the need to implement the recommendations of the Swynnerton Plan of 1953. The Swynnerton Plan was formulated to improve African farming, specifically the growing of cash crops and is recorded to throw encouraged the come near and growth of African cooperative s (Alila Obado, 1990).It was at this point that the recommendation that a fipple flute of cooperatives be appointed was made. In 1945, a new Cooperative Societies rule was enacted which allowed African participation in the cooperative movement. In 1946, a surgical incision of cooperatives was established and a registrar of cooperatives appointed. By 1950 most colonial gracious servants began to support and encourage the development of cooperatives and by 1952, about 160 cooperatives had been registered (Alila Obado, 1990).The post-independence era saw the rapid increase the in number of producer organizations and integration of the ones that al score existed. At this time, the g all overnment saw the cooperative movement as a marrow for African socialism, and strengthening common ties between the people from different regions of Kenya. In 1963 there were about 1000 cooperatives, which rapidly grew in number since then.Today, the co-operatives are an integral part of the Govern ment economic outline aimed at creating income generating opportunities particularly in the rural areas. The co-operative movement has been recognized by the Government as a vital institution for the mobilization of forgiving and material resources for various development progress particularly in the rural areas where the majority of people reside, earning their keep mainly from agriculture.The co-operative movement now contributes well over 45 per cent of Kenyas GDP and it is estimated that at least one out of every two Kenyans directly or indirectly derives his/her livelihood from the co-operative movement. Over the years, the co-operative movement remained predominantly agriculturally oriented. However, in the recent past, the co-operative movement has experience significant diversification in activities and interests notably savings and credit. another(prenominal) non-agro-based co-operatives seduce also emerged and ventured into areas such as housing Jua-Kali, building a nd construction, handicrafts, transport, small shell industries, etc. (Alila Obado, 1990).SACCOs are one of the leading sources of rural finance and in many rural areas the local SACCO is the only provider of financial services. composition the exact number of SACCOs operating in Kenya is not known, estimates range from nearly 4,000 up to 5,000 (Financial Sector intensify (FSD), 2010). soil SACCO Limited country SACCO fiat Limited was started by the Life Reformation Centre in 1999 with the aim of improving the economic livelihood of its members. It was registered in 21st January, 2000 infra the Cooperative Societies Act No.12 of 1997, and it is governed by the SACCO Societies Act of 2008 and its by-laws.The growth of the SACCO has been high since inception a fact attributed to good governance and leadership, staff commitment and efficacious superciliousness by members ( region Sacco Limited, 2011) .Figure Membership Growth Analysis. Source www.kingdomsacco.comVisionTo be a m odel SACCO, empowering the community economically and socially.MissionTo promote a savings culture, and provide affordable credit by oblationing sustainable financial solutions to enhance the economic welfare of our members and stakeholders.MottoPamoja TwaimarikaCore determine justnessHaving been founded by members with a church based background, it was agreed that Integrity is one of the most defining values that the leadership and membership of ground SACCO up hold. markabilityThe SACCO strives to carry out all its dealings in an open manner that is agreeable to members and co-operative values.ProactiveThe SACCO aims at meeting the all members needs by ensuring that it is effecting necessary and desired change to its operations and products as frequently as needed.Team SpiritThe SACCO Leadership, management and members view the SACCO as a family unit and as such always aim at working together as a team.Equality both members are treated equally without any favoritism and discrim inationProducts Offered by country SACCOCredit FacilitiesBusiness contributeDevelopment LoanEmergency LoanSchool Fees LoanSupa LoanOverdraft LoanJijenge LoanRembesha Maisha LoanFOSA Accounts lower-ranking Mustard AccountImara AccountKings Savings AccountKSA Corporate AccountKings Fixed AccountOther operateCheque Clearing sound CustodyBankers ChequesStanding OrdersSalary AdvanceNight Stop ServicesProblem StatementSACCOs provide a wide range of products, offer loans that are cheaper than banks, provide higher interest on savings and correspond to a muse by FinAccess, a significant percentage of the Kenyan population is unbanked (FinAccess, 2009). This recent study by the Financial Sector Deepening Trust (FSDT) revealed that banks serve 14.2 percent, SACCOs 13.1 percent and MFIs 1.7 percent of the population respectively. This is a freehand opportunity for SACCOs given that there is an untapped market. Since SACCOs do not raise equity from outside sources, theirstrength lies in n umbers i.e. the more the members, the better it is for the SACCO because this means that higher capital is raised. This study seeks to find out how SACCOs are tapping into this ready market, the methods they are using to do this and their effectiveness in reaching this marketPurpose StatementThe purpose of this study is to examine the elaborateness strategies occupied by commonwealth SACCO Limited.Objectives of the studyTo identify the expansion strategies assiduous by Kingdom SACCO LimitedTo examine the implementation of expansion methods employed by Kingdom SACCO LimitedTo determine the effectiveness of the expansion methods employed by Kingdom SACCO LimitedResearch QuestionsWhat are the expansion strategies employed by Kingdom SACCO Limited?How are the expansion strategies employed by Kingdom SACCO Limited implemented?What are the short falls/gaps of the expansion strategies employed Kingdom SACCO Limited?Justification of the studyThe vision held by Kingdom SACCO is to be a mo del SACCO. This coupled by the fact that its membership steadily increases every year makes it a suitable nerve to study. By studying the methods Kingdom SACCO uses to achieve a steady membership growth, a resource can be created for other SACCOs to reproduce in the country in order to improve the penetration and impact of SACCOs in Kenya. signification of the studyThe results of this study will seek to benefit the Government, the ministries of Finance, and Cooperatives Development in formulating policies concerning SACCOs and other financial institutions in order to improve banking and financial services in Kenya. Kingdom SACCO will be able to identify those expansion strategies that are effective and discard those that are not and so be able to position itself as a model SACCO, consistent with its vision. Other SACCOs in Kenya will be able identify and implement effective expansion strategies in order to boost membership and penetration of financial services in Kenya.AssumptionsT his study will be conducted under the future(a) assumptionsThe respondents will provide needed information objectively and fullyAll entropy provided by respondents will be correct and genuine scope of StudyThis study will be carried out at Kingdom SACCO Limited. Data will be collected from the top and middle level management at the headquarters of the SACCO in Githurai, NairobiLimitations and DelimitationsSince this is a case study focused on a single SACCO, the results of the study cannot be attributed to a whole industry as generally representative. The researcher also expects that there may be reluctance by the respondents to provide comme il faut accessibility of information since most businesses prefer to keep such data private. The researcher intends to seek full permission of the SACCO management to conduct this study in order to ensure full cooperation.Definition of TermsBOSA approve Office Services Activities. The branch of any SACCO that provides credit facilities to it s members.FinAccessAn arm of FSD Kenya. FinAccess has been established as the leading source of reliable data on financial access in Kenya and is widely cited in the media and by Government, the private firmament and international development partners.FOSAFront Office Services Activities. A service provided by SACCOs that enables its members to deposit and withdraw cash from or into their accounts just equivalent a bank.FSDThe Kenya Financial Sector Deepening (FSD) programme was established in early 2005 to support the development of financial markets in Kenya as a means to stimulate wealth creation and reduce poverty. Working in partnership with the financial services industry, the programmes goal is to expand access to financial services among lower income households and smaller enterprises. It operates as an independent trust under the supervision of professional trustees, KPMG Kenya, with policy guidance from a Programme enthronement Committee (PIC). In addition to the Govern ment of Kenya, funders include the UKs Department for supranational Development (DFID), the World Bank, the Swedish International Development Agency (SIDA), Agence Franaise de Dveloppement (AFD) and the Bill and Melinda Gates Foundation.ICAInternational Co-operative Alliance. The ICA was established in 1895, and brings together over 230 affiliated bodies from more than a hundred countries. In total, the ICA represents an estimated 760 million co-operative members worldwide.KSAKings Savings Account. A service provided by Kingdom SACCO that enables members to make their savings. It is available for individuals and corporatesSACCOSavings and Credit CooperativesSafe CustodyA service offered by Kingdom SACCO for the safe keeping of valuables.WOCCUThe World Council of Credit Unions (WOCCU). Established in 1970 with a membership from credit unions and co-operative financial institutions in 100 Countries, which between them have over 196 million members.