Institutional Requirements for Savings Mobilisation

Savings mobilization is a contract between parties: the SACCO receiving the savings and the SACCO member placing savings. Considering that the key consideration of the savers are; safety of savings, liquidity (easy access) and interest on savings, there
are critical measure that the SACCOs must address in order to successfully mobilise savings from their membership. These include;
 Strengthening governance and organisational structure
 Develop suitable savings products and marketing strategies
 Enhance management capabilities
Strengthening governance and organisational structure
Trust in the SACCO by the general membership is very important in savings mobilisation. This trust can be built through active participation of the members in the governance of their SACCOs. Because of the high level of participation in the affairs of the SACCOs, the members’ levels of ownership and commitment to the SACCO will be enhanced thereby increasing savings level at the SACCOs.
Savings mobilization also influences financial management function of the SACCO since the institution needs to prudently manage the funds to gain the members’ confidence and trust. The threat of deposit withdrawal due to savers’ lack of confidence in management should compel managers to operate within prudential guidelines, since widespread withdrawals would eliminate the base of funds and threaten the sustainability of the SACCO. As a result, members of the supervisory and administrative committees and managers are forced or expected to operate according to sound principles by ensuring the SACCO has adequate capital reserves, provisions for loan loss, and have liquidity reserves in order to protect client savings and the existence of the institution.
Developing savings products and marketing strategies
The SACCOs should aim to offer a wide range of savings products that are tailored to the specific needs of the members depending on the economic activities they are engaged in. These economic activities may include; agriculture, commercial activities, fishing amongst others. Having a wide range of savings products gives the members an opportunity to make choices between immediately accessible, liquid products, or semi-liquid accounts or time deposits with accordingly higher interest rates.
Simple and clear design of basic savings products enables depositors to easily select the product that best suits their needs. The simple and transparent design of the savings products also enables staff to administer them with ease, reducing administrative costs.
Having developed the savings products, the SACCO should embark on marketing and sensitising (create awareness) amongst the general community so that they attract many members from the communities to join the SACCO.
Enhancing Management capabilities
The mobilization of savings requires establishing a close and trusting relationship with the clients, which is easier when staff are familiar with the members and relate well with them. This therefore necessitates the SACCOs to do the following:
 Train staff in savings mobilisation: So that staff understand that it’s their duty to mobilise savings from the membership as well as knowing the importance of savings for the eventual success of the SACCO. This training also highlights the key factors that determine whether the members save informally or with formal institutions like the SACCOs.
 Financial Management: To ensure the safety of the members’ savings, the SACCOs need to improve on their financial management capabilities so that the savings are safeguarded from fraud through having strong internal control systems in place as well as prudently investing the funds to earn interest which can also be paid to the savers.
 Liquidity Management: This is important so that the SACCO does not invest all the funds and fails to pay members’ savings as and when they need to withdraw some of it. The managers of the SACCOs need a good liquidity management system in place so that the savers can access their savings while at the same time the SACCOs also maximise returns by investing the surplus cash by advancing loans to their members.
 Financial Records: The Umurenge SACCOs should maintain a good track record of accountability. This will ensure that the members’ trust is gained thereby enhancing the savings volumes at the institution.



One Response

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