Urithi Housing Co-operatives launches Sh1bn real estate scheme in Thika

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Kiambu-based Urithi Housing Cooperative Society has launched a Sh1 billion residential project in Kilimambogo on the outskirts of Thika town, targeting its 6,000 members. The venture, which will comprise 600 housing units, is funded through the society’s cash reserves, including financing from local banks.

Under the scheme, members contributed Sh355,000 to acquire the land and the sacco will help them secure building loans from local lenders.

Sacco chairman Samuel Maina told the Business Daily on phone that the project seeks to equip members with decent and affordable housing.

“The project stands on 100-acre piece of land. We started the groundwork last month and we have given the project a timeframe of two years to be complete. It will be named City Edge Project,” said Mr Maina.

He added: “Urithi Housing Co-operative Society will act as collateral to our members who want to acquire loans from the banks to develop their plots. We are in talks with Unaitas, K-Rep Bank and Equity Bank for the members to access loans.”

He said the first phase of the scheme is expected to cost Sh300 million and would be completed early next year. “The idea is to acquire more land through our members and start income generating projects that can accelerate the growth of the society,” he said.

Read More Here http://www.nation.co.ke/business/Sacco-launches-Sh1bn-real-estate-scheme-in-Thika/-/996/2395626/-/o6o661z/-/index.html


Safaricom Investment Co-operative unveils Sh1 billion housing project in Mlolongo

Safaricom Investment Co-operative has unveiled Sh1 billion housing project on a five acre parcel of land in Mlolongo.  The 300 housing units dubbed, Blue Bells Garden will be constructed in two phases. They will be completed in 2015. The project will be financed through a partnership with Co-operative Bank Speaking during the ground breaking, Safaricom Chief Executive Officer Bob Collymore said the first phase will be ready in September 2014, while the second phase will be ready at the end of 2015. “SIC has planned to invsafaricom-saccoest more than Sh1billion in the entire project with the first phase having 160 units and the second phase having 140 units,” said Collymore yesterday. “These houses will be a mix of two and three bedroom units and will contribute towards reducing the 150,000 housing deficit that the country experience annually.” The project will also accommodate a commercial centre to serve its residents.
Read more at: http://www.standardmedia.co.ke/business/article/2000083297/safaricom-sacco-unveils-sh1-billion-housing-project-in-mlolongo

Types of savings products

The SACCO members have the urge to develop and to make their lives better. The question remains therefore ―How can they make their lives better?‖ Saving for the future is one of the ways that they can improve on their livelihood. It is therefore essential to know the various savings products available so that one makes the best choice and selects what suits them best. Savings products can broadly be classified in to three namely;
 Compulsory savings products
 Voluntary savings products
 Contractual savings products.
Compulsory Saving:
These are funds that must be contributed by all members of the SACCOs as a condition of membership and in some instances to access credit (loans). Compulsory savings can be considered as part of a loan product rather than actual savings product since they are closely tied to receiving and repaying loans. Compulsory saving is a saving that a member is forced to make on regular basis; it is a membership saving and must be saved on a weekly or monthly basis. This compulsory saving is collected to lend to
members. If members fail to save on time they will get penalized based on the saving policy of the society. Unless the member quits from membership, he or she should save on regular basis. If a member wants to withdraw from the SACCO, he will have the right to take this compulsory saving. The SACCOs are supposed to provide interest for this savings. There are 2 kinds of compulsory loans i.e.
Group saving: composed of a certain percentage of the loan portfolio contributed monthly or weekly. Saving continues through the loan period and therefore protects the portfolio on one hand and serves, as an investment fund for economic ventures of the group members to supplement the loan in case of emergency needs.
Personal or individual saving: This is where each borrower is required to save a minimum amount per month but motivated to save more voluntarily.
Voluntary Saving:
Voluntary savings are savings, not for access to credit, but for the sake of saving. These are not an obligatory part of accessing credit services. They are provided by both the borrowers and non borrowers who can deposit or withdrawal according to their needs.
The voluntary savings are best fit for people who don’t receive constant cash flow like farmers who get incomes when they sell off their produce once or twice a year. They can make voluntary saving during harvest time, and transfer monthly to their compulsory saving accounts. Farmers, and other individuals, can save the full amount for the coming year’s compulsory savings in advance with the SACCO by depositing 12 months worth of saving in a voluntary account. Following that, each month on the appropriate day the member will come to the SACCO to withdraw the amount of one month’s compulsory saving from the voluntary saving -account and deposit it in the compulsory saving account. This maintains the fundamental function of the SACCO and allows individuals with seasonal incomes to be members. This ensures regular flow of cash to the SACCO society and promotes members participation. This kind of saving can be withdrawn at any time when the owner needs it. The SACCO society may or may not provide saving interest for this voluntary savings. Farmers are highly advised to save on voluntary saving for small capital investment like purchasing seed for cultivation.
Contract Saving:
These are the kind of saving accounts where by the person saves to meet a particular goal.
These include:
1. School fees savings accounts: This is the type of account used by most parents so that they are able to save for their children’s education.
2. Target Savings Accounts: This is where the client opens up an account particularly to meet a particular target like buying land, paying a mortgage among others.
3. Fixed Deposit Accounts: This is the savings accounts were by a person deposits once and they withdraw the money after a period of time. The time ranges from 3 months onwards.
This kind of saving is not used by most SACCOs unless the SACCO has acquired and mastered the good skills in managing the loans and savings effectively. It can be short-term saving like if someone wants to pay school fees; he may save to pay school fees. It can also be long term like fixed deposit accounts were time deposit bring the opportunity of high interest rate on savings. This kind of saving is good in the future when the SACCO is in a good capacity and position of managing its savings and loans properly and if there is a shortage of feasible financial demand by members. This kind of saving can be collected from members and none members but the amount, period of collection and interest for this saving should be decided by the General Meetings of  members.


Be careful with fast growing Saccos!!!

People, Processes and Systems should be in place before Saccos go “viral.”  A Sacco growing fast is not a bad thing but management should make sure they are ready for it. I have witnessed some societies that were just recently registered that have opened up branches across the country raising questions as to whether they followed the right procedures in doing so.

I will be more comfortable with say Unaitas Sacco growing very fast than with a newly registered society like Good Life Sacco. Unaitas has been there for years and they have the experience running a co-operative business. Its important to have the right people, processes and systems in place before aggressive marketing.

Some of the newly registered societies are usually restricted to operate within a small area of operation e.g. a sub-county or county. Sometimes without close supervision, they expand very fast opening branches all over the country without following the required procedures or sticking to the society’s by-laws especially the area of operation and resolutions passed by members.

I have also realized that some of these newly registered and fast growing societies have hidden intention and the public should be wary of these societies and inquire appropriately before committing. Hidden agenda specifically boils down to management/board of directors. Some of them have no intention of exiting the board and have carefully orchestrated an election “system” where they get re-elected year on year out. They use intimidation or membership ignorance to continue being in office. They have somehow put in place an election policy that they sneaked into a general meeting and had it approved that assures assures them of re-election. I still believe an election nomination process that excludes independent persons, is a sham. How can a nomination committee be composed of same people in the management committee who are to be subjected to an election process and to make matters worse, end up nominating exact number of people required? Isn’t this an election carried out by board and not members of the society?

Some of the fast growing societies have also sometimes close relationship with the church or the company within which the membership is drawn. They have what they call “a patron” who has way too much sway when it comes to societal matters. They fail to note that the society is an autonomous and synonymous organization. That the society can be sued, it can sue, own both movable and immovable property, etc. The membership in this scenario has been reduced to the role of attending meetings….just to fill the hall!! They have also failed to note that the Co-operative Societies Act and Rules, does not mention “patron” anywhere!!

I predict very soon, we will have some of the fast growing societies collapsing. This is because they have not considered some of the following issues before going ‘viral’-

PEOPLE: Do you have people in place who will steer and direct the growth? Has the management been trained/educated on basic co-operatives operations, Act, Rules? Does the staff have the required qualifications and experiences? Do the membership know what are the objectives of their co-operative? Do you know the stakeholders??

PROCESSES: Are there loan applications, membership withdrawal, staff recruitment, code of conduct, staff promotion, staff dismissal, elections, investments, dividends payments, etc processes that are known by all concerned? How did these processes come into being? How are meetings conducted management (board of directors), supervisory, management/supervisory and general meetings? Are membership views taken into consideration? How is the management committee, supervisory committee, staff and membership taken into account?  How are disputes resolved? Do you have an ICT system in place to manage the unprecedented growth? Is there a strategic plan for the society? How are shareholders and stakeholders engaged? Is there a risk management programme?

SYSTEMS: How do you manage people and processes in your society? Is there congruence of action within the society? Does these system re-invent or how agile is it? How do you make sure that society’s vision is shared across board? Does this system infringe on people and processes? What is the organizational culture like?

We shouldn’t sit down and wait. The ministries (both national and county) concerned should have policies in place to check on Saccos growth and fund sub-county offices to effectively and efficiently carry out their mandate. Otherwise new kinds of DECI is in the making.


I will refer to this article Will Saccos Die in the Devolved Governments Era I wrote here sometimes back and how the leadership of countrywide Saccos have failed their membership despite the impending difficulties. I had said that remittance could pose a challenge, and it sure did and is still an ongoing challenge. We all read these story Ukulima Sacco freezes staff loans on Daily Nation and you wonder how comes the leadership of Ukulima and other countrywide Saccos did not anticipate this problem and come up with measures to safeguard their members funds beforehand. 

The leadership of co-operatives in Kenya are sometimes laden with incompetence beyond your imagination. Yes, you can see buildings with names of co-operatives written on them and see suited men and women looking important heading to board meetings. But the truth is, most don’t measure to the task. They are ineligible even to attend a baraza in a village.

Devolution was coming. Staffs of certain sectors were to be devolved. We all knew this. News were full of these information. But the leadership just sat there and opted to be reactive. The sane thing to do was to visit all 47 counties and establish a rapport with the salary sections. Provide them with Sacco details and make sure to get contacts of all the 47 counties so that whenever the monies are not deducted as provided for in the deduction list or remitted within the stipulated time as per Section 35 of the Co-operative Societies Act, then you know who to contact and not just sit down and telling your members that you are waiting!!! Get realistic what are you waiting for? Your Saccos to collapse due to impending financial challenges?

GHRISIt is a high time the leadership of the co-operative movement embraced technology. The government through GHRIS (Government Human Resource Information System) has provided (is it functional? Doubt it!!) an online platform where third parties e.g. Banks, MFI, Saccos, etc can login and access their members details. It would have been a relief if they could have used the system to provide deduction list or access individual members and have deductions posted for that particular month. This would have made it easier for county governments who in return would have paid the net salaries to its staffs and paid the various societies their members’ contributions within stipulated time. Things would have been easier and efficient instead of sending deduction lists to the 47 counties……this is where I start thinking if there is anyone out there who matters and has read what I have put here hehehe 🙂 Anyway, that is they way of the future. Cheers.


What are the Advantages and Disadvantages of Co-operative Society?

Advantages of Co-operative Society

1. Easy to form:



The formation of a cooperative society is very simple as compared to the formation of any other form of business organisations. Any ten adults can join together and form a co-operative society. The procedure involves in the registration of a cooperative society is very simple and easy. Check-out my earlier post on registration procedure.

2. No obstruction for membership:

Unless and otherwise specifically debarred, the membership of cooperative society is open to everybody. Nobody is obstructed to join on the basis of religion, caste, creed, sex, colour etc. A person can become a member of a society at any time he likes and can leave the society if he does not like to continue as member. Based on one of the principles of co-operatives of voluntary and open membership.

3. Limited liability:

In most cases, the liabilities of the members of the society is limited to the extent of capital contributed by them. Hence, they are relieved from the fear of attachment of their private property, in case of the society suffers financial losses or goes bankrupt.

4. Service motive:

In Co-operative societies members are provided with better good and services at reasonable prices. The society also provides financial help to its members at concessional rates unlike mainstream banks. It assists in setting up production units and marketing of produce of small scale farmers.

5. Democratic management:

The co-operative society is managed by the elected members from and among themselves. Every member has equal rights through its single vote but can take active part in’ the formulation of the policies of the society. Thus all member are equally important for the society. Derived from the principle of democratic member control.

6. Stability and continuity/Perpetual succession.:

A co-operative society cannot be dissolved by the death, insolvency, lunacy, permanent incapability of its members.  It has got separate legal existence from its members. New members may join and old members may quit the society but the society continues to function unless all members unanimously decided to dissolve the society.

7. Economic operations:

The operations carried on by co-operatives societies are economical due to the eliminations of middlemen. The services of middlemen maybe provided by the members of the society at minimum cost or eliminated completely. The recurring and non-recurring expenses are minimized. Further, the economies of scale of production or procurement, automatically reduces the price of goods, thereby minimizes the selling price.

8. Surplus shared by the members:

The society sells goods and services to its members on a nominal profit. In some cases, the society sells goods and or services to outsiders. The profits are utilized in meeting the day-to-day administration and other costs of the society. The procedure for distribution of profit/surplus is stated in the Co-operatives Societies Act Cap 490. Some portion of the surplus is distributed as dividends or interest on deposit and some kept as reserve (i.e. 20%).

9. State patronage:

Government provides special assistance to co-operative societies to enable them achieve their objectives though currently through Finance Bill 2013, the government is introducing excise duty of 10%. Government also extends, or used to, many type of subsidies to co-operative societies strengthening their financial stability and sustainable growth in future.

Disadvantages of Cooperative Society:

Despite the many advantages, co-operative societies suffer from certain limitations or drawbacks. Some of these limitations are:

1. Limited resources:



Co-operative societies financial strength depend on the capital contributed by its members. The membership fee is limited so is the monthly contributions in case of Saccos as their members belong to the lower and middle class. Thus co-operatives initially are not suitable for the large scale businesses which require huge capital. Though this can be overcome by increasing membership with the downside of minimal returns to its members.

2. Inefficient management:

A co-operative society is managed by the members only. They may not possess any managerial and special skills. This is considered as major drawback of this sector.

3. Lack of secrecy:

Co-operative societies do not maintain secrecy in their businesses because the affairs of the societies are openly discussed in meetings. But secrecy is very important for the success of a business organisation. This paved the way for competitors to compete in more effective ways.

4. Excessive Government interference:

Government may influence the decision of the Board which may or may not be favorable for the interest of the society and its members. Excessive state regulation, interference with the flexibility of its operations and therefore affecting adversely the efficiency of the management of the society. Rare occurrence in Kenya

5. Absence of motivation:

The members may not feel enthusiastic because the law governing the co-operatives puts some restriction on when to invest or decision making process which can be lethargic and bureaucratic.

6. Disputes and differences:

The management of the society constitutes the various types of personnel from different social, economical and academic background. Many a times they strongly differs with one another on many important issues. This becomes detrimental to the interest of the society as it may lead to delayed decisions. The different opinions and disputes may paralyses the effectiveness of the management.

This article originally appeared on http://www.preservearticles.com/201101193579/advantages-and-disadvantages-of-cooperative-society.html and was adapted for this blog and Kenya audience.

Did you know that…

a) No management or Supervisory Committee member is allowed to receive from the society any payment apart from sitting allowance, and travelling and subsistence allowance, except an honorarium from the net surplus as allowed in the By-Laws.

juab) The Management and Supervisory Committee members, and employees of the society hold in the strictest confidence all transactions of the society with its members.

c) When any Committee member is disqualified or unable to perform his duties, the Committee can co-opt a member or members of the society to serve on the Committee until the next general meeting if the number falls below five.

d)  No member of the management or Supervisory Committee shall in any manner participate in the deliberations and determination of any question affecting his/her financial interest. In the event of any disqualification, the remaining qualified Committee members present at the meeting, if constituting a quorum with the disqualified person may exercise, with respect to the matter, all powers of the Committee.

f) A copy of the By-Laws is to be furnished to every member who joins the society or on request upon payment of a fee not exceeding its actual cost to the society.


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