Metropolitan National Sacco Limited has commenced a restructuring process that will allow the 100,000 member outfit to streamline its services and enhance service delivery to its members.
The 43 year old Sacco has entered into a strategic partnership with Cooperative Bank in the process which chairman Christopher Karanja says will allow Metropolitan to build strong capacity for long term sustainability.
In 2018/2019, the Deposit Taking Sacco suffered a major setback as the loans advanced to members surpassed savings, some members were leaving because of the delays in processing their salaries and loans, more others had applied to stop being members of the Sacco and non-perfoming loans (NPLs) amounted to over Sh1.2 billion.
It took the intervention of the Cooperative Bank of Kenya to salvage the situation.
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.
An approval of the transformation strategy at the 2019 Annual General Meeting (AGM) also put the Sacco on the path to recovery, this year, they reported that deposits by members grew by 6 per cent to close at Sh7.32 billion, they also recovered over Sh110 million of NPLs, attracted new members, retained those who wanted to leave and brought back those who had left, and appointed a new Chief Executive Officer (CEO).
The new CEO Benson Mwangi said, “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”.
Cost reduction strategy
“The operational efficiency initiatives resulted in an overall cost reduction of Sh96 million, mainly driven by savings in financial and administrative expenses which were further powered by enhanced uptake of digital service delivery channels.”
The Sacco paid interest on deposits at the rate of 6.25 per cent, up from six per cent in 2018. The interest on members’ deposit rose to Sh367 million from Sh334 million the previous year.
In an increasingly trend as deposit-taking Saccos seek to boost their capital and liquidity, 50 per cent of the interest rebate was retained as deposits while the rest was paid out in cash.
Dividends on shares have been paid at 6.25 per cent compared to six per cent in 2018.
The board said it had embarked on the second phase of the transformation strategy, which involves leveraging on technology. This, the management believes will lead to more efficient service delivery.