Metropolitan National Sacco house cleaning’ exercise to rid itself of non-perfoming loans (NPLs) has started paying off after the Sacco which covers mostly teachers recouped over Sh100 million shillings.
Few years ago, the Sacco was experiencing financial difficulties caused by non-performing loans amounting to Sh1.2 billion.
The raft of reforms that it undertook since then were meant to boost the earnings of its members. These improvements saw the Sacco register an increase in its asset value to Sh15 billion from Sh13 billion the previous year (2019). Its share capital grew from Sh742 million to Sh755 million in the same period. Its cash reserve also recorded an upward trend.
“The Sacco has seen a reversal in members who wished to withdraw their membership while the few who had submitted withdrawal notices are still offered full membership benefits including dividends,” said Sacco Chief Executive Benson Mwangi said in March 2020.
It wasn’t always smooth running as in 2017, most members of the Sacco had complained that they couldn’t access their salaries and loans. However, a little help from their Banker Cooperative Bank of Kenya (Co-op Bank) and changes in running of the Sacco has helped it heal.
Co-op Bank through its Co-op Consultancy build capacity for the Sacco’s long term sustainability and also restructure the Sacco’s funding requirements to better manage the members’ monthly loan demands as well as the overall liquidity flows.
As at the end of 2018, the Sacco was said to have heavily borrowed money from Commercial Banks to lend to its members to the tune of Sh3.143. It was in the red as the money lent surpassed members savings.
However, by 2019 the strategy to reform was working as the Sacco attracted new members.
“Following the approval of the transformation strategy at the 2019 Annual General Meeting (AGM), we have recruited an additional 167 new members and received 2070 membership reinstatements from the previous period. In that period, we have also seen a rise in the number of members wishing to reverse their earlier requests to withdraw their membership,” Mr Mwangi said.
The CEO who came in in July 2019 said technology was in the forefront of their reforms for growth.
“We are now embarking on phase two which will involve leveraging on technology to improve on service delivery, rolling out of new products and launching an online banking platform,” he said.
The changes at deposit-taking Metropolitan Sacco’s strategy are anchored on diversification, customer service excellence and development of new products.
The Sacco which changed its name in 1999 from Kiambu Teachers Sacco to a more cosmopolitan one to serve a wider clientele base was founded in 1977. According to its website, the savings society operates 8 branches and 13 service centers.
In 2008, the financial institution undertook a massive leap which saw its membership grow from 5,557 to over 50,000 currently. This can be attributed to the opening up of membership to other members not necessarily teachers.
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