Savings Management

The savers are mainly concerned with the safety of their deposits as well as being able to access these funds as and when the need arises. These two reasons therefore call for good management of the savings if the SACCO is to effectively mobilise savings from their membership.
Effective savings management requires consideration of liquidity reserves, proper cash handling procedures, and adequate internal controls on the part of the SACCO. These will ensure the SACCO has the trust of its members since savings mobilization requires
members’ confidence that they will be able to access their savings when they want them.
 Liquidity management requires a reserve to be created as a percentage calculated on all withdrawable savings. The SACCO should deposit these reserves in short-term, secure investments in formal financial institutions. This reserve ensures that the SACCO will have funds available to meet withdrawal and disbursement demands.
 Good cash management procedures at the SACCOs are critical for the successful management of the savings. This is so considering that a substantial portion of the money held by the SACCO is mobilised from savers so if it is not handled with extra care, it can spell danger. The cash management procedures should include daily cash retrieval records from the safe by the accountant/cashier, logging in the accountant/ cashier’s balancing report, general journal to record cash inflows and outflows. These records should be filled by the accountant/ cashier and verified and signed by the manager.
 The SACCOs should ensure the safety of the savings by having adequate internal controls. The controls will include amongst other preventive measures like the safes having two sets of locks and keys (one set of keys kept by the manager and the other by the accountant on another senior person), daily filling of records that are verified by the manager, and regular reconciliation of the cash record with the cash count. No one person should be able to open the safe and access money without the other being present, i.e. the 4 eyes principle has to be observed at times. The members of the supervisory committee should also regularly conduct
cash counts. These measures will amongst other ensure that fraud risk is well managed.


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