BY NBM WRITER
As Stima Sacco performance in 2019 improved, shareholders will benefit from a Sh2.3 billion payout in dividends and interests on deposits. The Sacco’s board of directors recommended payment of a first and final dividend of 14% per share on fully paid up shares as at December 31 last year, and interest rebates on members’ deposit at the rate of 10.5% for the year under review.
The society’s national chairperson Rebecca Miano is enthusiastic about the significant improvement on brand equity. She said, while speaking at the 46th Annual General Meeting at the Kenya School of Monetary Studies that the payouts are as a result of a successful customer centric strategy. As a majority of companies struggle to sustain the pressure coming from tough business environment, the Sacco is moving to higher heights. “We believe that these are good returns on members’ investments in the Society. As a responsible corporate entity, we are also committed to embracing sustainable practices across our Sacco so as to support our long-term growth,” said Mrs Miano.
The Sacco posted a pre-tax profit of Sh1.03b in 2019 compared to Sh972.25m in 2018, which is a growth of 6%. So far, the Society’s membership has increased by 17,545 (15%) from 114,071 in 2018 to 131,616 in 2019 thanks to active recruitment drive. Turnover was Sh5.63b in 2019 up from Sh4.60b in 2018, which is a growth of 22%. This was as a result of an aggressive growth on the loan portfolio occasioned by the review of products and services in line with the members’ needs. At the same time, the share capital grew from Sh1.50b in 2018 to Sh1.76b in 2019 thereby representing a steady strengthening of the capital base and also a cushion to the Sacco in its pursuit of sustainable growth. Deposits too increased by 14% last year from Sh24.90b in 2018 to Sh28.27b, which is an indication of continued trust and confidence in the Sacco by members. Lending increased by 15% from Sh24.94b to Sh28.62b.
“Our performance in 2019 clearly demonstrates the underlying health of the business and the potential of our strategy. Indeed, we are making great strides towards our strategic goals, as we continue to realise our mission of empowering members for life,” she added.
The strategy that is driving sustainable growth involves three priorities, namely; business growth and brand equity, member value creation and capital, and financial sustainability. It focuses on Internet and mobile banking, physical branch footprints, branchless and agency banking as well as strategic alliances.
As most deposit taking societies continue to digitize their operations, what is important is the financial health of a particular player. With an asset base of Sh36.5b, a loan book of Sh28.62b, a deposit base of Sh28.67b and a membership of 131 616, the society is strong enough to collaborate not only with corporates and governments but also individual customers.
Stima Sacco chief executive Chris Useki said that the society is on the right path as far as growth is concerned, and is in the process of rolling out more customer focused products and services aimed at empowering members.
Mr Useki said that some of the initiatives driving growth not only include introduction of agency banking to bring services closer to the people but also faster salary processing dubbed “salary 360”, and direct debit to address challenges in funds remittances. Other big services are low cost mortgages, sharia complaint services and instant ATM card services, whose launch was shelved from last year to this year.
Further, the society has embarked on investment in a biometric member recognition system to curb the risk of identity theft alongside installation of fraud monitoring system to ensure security of its resources. Digitization experts say the innovative programme will provide an additional impetus that will help in the push to steady growth.
In what seems to be a fresh market push for great product and service delivery, the society is keen on the 2019 – 2024 strategic plan, which is expected to transform its business model. At this particular juncture, what will enhance growth is adoption of innovative products, unparalleled customer service, aggressive resource mobilization and expanded distribution channels across the country.