What if we formed a Sacco using ‘members’ who have ‘liked’ the Facebook Page “Co-operative Movement in Kenya”…?

We are 693 of the Facebook Page Co-operative Movement in Kenya. What if we formed a Sacco? Is it even plausible? I know we are going to find it hard defining and selling our common bond as “Social media users who have liked the Facebook Page ‘Co-operative Movement in Kenya’ and engage in lawful businesses and professions in Kenya” to the Commissioner of Co-operatives. But wont it be something if it were possible? 693 is a good number as the Law only requires 10 people!!

PAGESo why am I saying it is difficult through questioning if it were possible? For any group of people who would like to start a Sacco society, will be required to notify the closest co-operative office and organize for a pre-co-operative education with all eligible/potential members. Now that is the problem. How and where are we all going to meet? Do we even have a history together to say that we know each other and we have had a similar experience through a self-help group? I am saying this because, all successful co-operative ventures started as small groups of people who knew each other and that is how trust is established and would be members can bring resources together and entrust the same to the elected few.

But lets see how such a co-operative will look like with the 693 members!! Just assumptions now:-

  • Entrance/registration fees    =    1000/= (693 members* 1000/= gives us 693,000/=)
  • Value of one share                     =     20/=
  • Minimum shares 100 valued at = 2000/= (i.e. 20/=*100 shares and total share capital is 2000*693= 1,386,000.00/=)
  • Monthly contributions            =    500/= (For one month 500*693= 346,500/=)
  • Saccos give loans after 6 months from the date of registration. So the total monthly contributions will be 346,500/= *6 =2,079,000/=
  • At the end of six months we would have had a total of Ksh. 4,158,000.00 minus expenses.

Expenses are mainly:

  • Registration expenses   =   10,000.00 (including Ksh. 3,500.00 for application and registration fees, cost of hiring a venue, printing and stationery costs i.e. making the By-Laws and economic appraisal, e.t.c.)
  • Bookkeeping fees   = 8,000.00
  • Audit and supervision fees  =  15,000.00
  • Travel and subsistence allowance   =  20,000.00
  • Sitting allowance of the committees  =  30,000.00
  • General meeting expenses  =   20,000.00
  • Education and training  =  25,000.00

Total expenses for the first year = 128,000.00/=

Ksh. 4,158,000 – 128,000.00  =  4,030,000.00/=

After 6 months we loan out 80% of Ksh. 4,030,000.00 i.e. Ksh. 3,224,000.00 repaid within 6 months at 1% reducing balance to 322 each taking Ksh. 10,000.00 giving us an income of Ksh. 112,840.00

Note that it looks like we did not break even the first year but remember registration/entrance fees is treated as income and also we will be recruiting more members from the figure of 693 and we will still be giving out loans as we move from the 7-12th month. We can also include other sources of income like fines/penalties, interest from bank, etc.

Okay buddies, remember Saccos are the best way to save. Note the interest I indicated in the example above as 1% on reducing balance!! Majority of Saccos charge this interest, ask around. Also note that the monthly contributions are not restricted to the minimum given of Ksh. 500.00 above; you can save more than that.



2 Responses

  1. Reblogged this on ambulivictor's Blog.

  2. This is good Mwangi, but with the Y- Generation reaction and actions security ought to be looked at more critically


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