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CHAIRMAN’S REPORT TO THE AGM ON 9TH FEBRUARY 2019
CHAIRMAN’S REPORT TO THE AGM ON 9TH FEBRUARY 2019
Dear members welcome to this year’s Annual General Meeting. It is a great honour to present to you the annual report and financial statements for the year ended 31st December 2018.
Allow me briefly to report to you matters on a few areas of interest.
Operating Environment
Our Sacco has maintained an upward trajectory amid the unrest caused by the looming proposal to amend current legislation governing the sector. To mention but one, the statute law (miscellaneous Amendments Bill 2018) which asserts the introduction of a new class of members are punitive and run the risk of breaking the spirit of Co-operative movement. Other changes introduced include new IFRS9 that states that we should provide for 1% of loan loss for performing loans, a factor that reduces the revenues earned. Besides the provisioning, we are also required to surrender all unclaimed financial assets to the government. We have also witnessed increased levies by the regulatory body SASRA from 1% to 1.7. I cannot forget to mention the capping of interest rates which has remained a challenge to most financial institutions.
Capital Raising Initiatives
In the quest to steer forward the Sacco’s growth, tap into the presenting opportunities and effectively and efficiently serve our members, the board has taken deliberate efforts to strengthen the Sacco’s capacity to raise both share capital and debt equity to support the ever growing demand for credit.
In the near future, the board will be launching an initiative to raise debt equity from the current and prospective members. The beauty of this capita is that it can be refunded after maturity convertible or rollback. I appeal to you to take this advantage and invest in this high yielding facility.
Staff/Employees
The Sacco had a total of 116 employees as at December 31st 2018. The quality of an organization is essentially represented by its employees. To maintain the quality workforce, the board constantly strives to invest in developing and enhancing their skills to match the set growth demands of the Sacco and its members.
The board embraces performance competencies to reward and retain the best talents.
We endeavour to instil and live the Sacco’s core values of Creativity and Innovation, Integrity, Effective Leadership and Governance, Teamwork and Professionalism.
Positioning for Growth
The Sacco has continued to enjoy tremendous growth in terms of membership from 12,000 members in 2017 to 14,000 members in 2018. Asset base increased from 3.8 billion to 4.4 billion. The total loan portfolio also rose from 2.9 billion to 3.3 billion within the year. Our branch network stands at 11 operational outlets in six counties with Nairobi being the newest.
The opening of Mikinduri Satellite is in progress. We have a total of 63 agencies all geared towards extending convenience to our members and giving us an avenue to tap to new businesses.
ICT/Technology
Solution Sacco has improved its technology channels by introducing a new and more user-friendly mobile platform ‘PESAPLUS’ (*686#) in 2018. We have also upgraded our ATM machines and ATM cards to be more superior in terms of security and usage.
Agency banking was also upgraded within the year from Spotcash agency to Solution Sacco Mashinani agency. We intend to launch a mobile application and internet banking within the year 2019. The Sacco has also invested heavily to ensure that our systems are secure and safe as incidences of cyber crime are now on the rise, especially in Saccos. We are also in the process of creating our own private Wide Area Network which will help in enhancing efficiency for the systems therefore reducing the amount of time it takes to serve you and also reduce on the connectivity costs.
Insurance
We have introduced an insurance agency dubbed Suluhisho Letu Insurance agency to better serve our members.
I, therefore, urge you all to give us this business as we are even taking it a notch higher by advancing insurance premium funding (IPF).
Challenges
- Delocalization, a recent exercise being carried by TSC has seen many leaders and members transferred to far regions thus widening the relationship gap.
- Devolution – Due to lack of substantive Co-operative Ministry, multi county Saccos have continued to suffer due to unclear registration procedures which need to be done at respective county levels.
- Delayed remittances from employers thus denying us enough cash flows.
- Political uncertainty – We hope the clamor for constitution change will not polarize the political climate which adversely affects business as experienced in the past.
Appreciation
I wish to sincerely appreciate your support and patronage. Indeed, we would not be where we are today without the consistent, unequalled loyalty and confidence you have for us. We look forward to serving you better.
My board, management, staff and the entire Solution Sacco fraternity says a big THANK YOU for the support of our over 14,000 members. We commit ourselves to growing member value and providing member focused products and services and unprecedented member experience.
We will strive to be worthy of the trust you have bestowed on us. In fact, you are the reason for our Sacco.
We also remain appreciative of our business partners, stakeholders and the regulators who have tirelessly continued to provide invaluable support.
To our employees, I wish to express our sincere gratitude for making year 2018 a fruitful one by diligently playing your part.
Lastly, I thank you fellow board members for your contribution, dedication, support as we together propel this great organization to higher heights.
I wish you all a prosperous year 2019.
May God bless you.
Peter K. Igweta
CHAIRMAN
