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    Co Op Finance

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    Daniel Masha
    The document summarizes the key topics to be covered in a seminar for Kilifi Teachers SACCO Society Ltd, including definitions of cooperatives and SACCOs, how SACCOs differ from other financial institutions, sources and applications of cooperative finance, reasons why SACCOs have difficulties raising adequate finance, and suggested solutions. The seminar aims to discuss definitions, the need for finance, cooperative finance sources and applications, challenges in obtaining adequate funding, and recommendations around encouraging savings, diversifying products, taking advantage of regulatory changes, and expanding membership areas.

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    Co Op Finance

    Uploaded by

    Daniel Masha
    27 views16 pages
    The document summarizes the key topics to be covered in a seminar for Kilifi Teachers SACCO Society Ltd, including definitions of cooperatives and SACCOs, how SACCOs differ from other financial institutions, sources and applications of cooperative finance, reasons why SACCOs have difficulties raising adequate finance, and suggested solutions. The seminar aims to discuss definitions, the need for finance, cooperative finance sources and applications, challenges in obtaining adequate funding, and recommendations around encouraging savings, diversifying products, taking advantage of regulatory changes, and expanding membership areas.

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    The document summarizes the key topics to be covered in a seminar for Kilifi Teachers SACCO Society Ltd, including definitions of cooperatives and SACCOs, how SACCOs differ from other financial institutions, sources and applications of cooperative finance, reasons why SACCOs have difficulties raising adequate finance, and suggested solutions. The seminar aims to discuss definitions, the need for finance, cooperative finance sources and applications, challenges in obtaining adequate funding, and recommendations around encouraging savings, diversifying products, taking advantage of regulatory changes, and expanding membership areas.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    27 views16 pages

    Co Op Finance

    Uploaded by

    Daniel Masha
    The document summarizes the key topics to be covered in a seminar for Kilifi Teachers SACCO Society Ltd, including definitions of cooperatives and SACCOs, how SACCOs differ from other financial institutions, sources and applications of cooperative finance, reasons why SACCOs have difficulties raising adequate finance, and suggested solutions. The seminar aims to discuss definitions, the need for finance, cooperative finance sources and applications, challenges in obtaining adequate funding, and recommendations around encouraging savings, diversifying products, taking advantage of regulatory changes, and expanding membership areas.

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    Attribution Non-Commercial (BY-NC)
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    You are on page 1of 16

    KILIFI TEACHERS SACCO SOCIETY LTD.

    DELEGATES SEMINAR TEMPLE POINT RESORT, WATAMU 16TH 17TH JUNE 2011

    Satisfaction within our means

    Areas to be covered

    I. Introduction Definitions How Saccos differ from other financial institutions Need for finance II. Co-operative Finance
    Sources Applications

    Satisfaction within our means

    Areas to be covered (CONT III. Why Saccos experience difficulties in raising adequate finance IV. Suggested way forward

    Satisfaction within our means

    introduction
    DEFINITIONS CO-OPERATIVE
    DEF I: is a business organization owned and operated by a group of individuals for their mutual benefit DEF II: [ICAS DEFINITION STATEMENT (PRURAL)] As autonomous associations of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through jointly owned and democratically controlled enterprises

    Satisfaction within our means

    INTRODUCTION (CONT) - DEFINITIONS


    DEF III: as a business owned and controlled

    equally by the people who use its services

    SACCO/CREDIT UNION [SACCO acronym for Savings


    and Credit Co-operatives]: is a co-operative financial

    institution that is owned and controlled by its members and operated for the purpose of promoting thrift, providing credit at competitive rates, and providing other financial services to its members.

    FINANCE
    In general terms, it is the task of providing the funds for business activities.

    Satisfaction within our means

    INTRODUCTION (CONT)

    HOW SACCOS DIFFER FROM OTHER FINANCIAL INSTITUTIONS


    Saccos represent people centered organizations, as opposed to capital centered commercial companies. In a Sacco, customers are also its owners . In other firms, customers and owners are separated

    In a Sacco, Price of share is fixed not traded in an open market

    Satisfaction within our means

    INTRODUCTION (CONT)
    [how saccos differ]

    In a Sacco, objective is to benefit member/customer by offering high quality member service. In other firms, primary objective is to benefit owners by maximizing profits
    In a Co-op/Sacco, profit/surplus generation is secondary: ought to be the result of efficient operations

    Satisfaction within our means

    INTRODUCTION (CONT)
    [need for finance]

    NEED FOR FINANCE Start-up capital for acquisition of fixed assets: buildings, furniture, equipment etc Funds for operations to meet operating expenses e.g stationery, rent, water, electricity, salaries etc Funds for Investments in core business: lending in the case of Saccos and other profitable securities Funds for Growth and Expansion in acquisition of new fixed assets e.g additional branches, modernization of processes (ICT improvement) Business continuity: Retained earnings, reserves, inst capital

    Satisfaction within our means

    co-operative finance
    SOURCES AND APPLICATION OF FINANCE
    INTERRELATIONSHIP BETWEEN SAVINGS, CAPITAL AND INVESTMENT

    CAPITAL
    SAVINGS INCOME
    CONSUMPTION

    INVESTMENT

    Satisfaction within our means

    SACCOS CAPITAL/FINANCIAL STRUCTURE

    CAPITAL
    OWNED BORROWED

    SHARE CAPITAL

    RESERVES

    MEMBERS

    GOVT

    FINANCIAL INSTS.

    BUSINESS PARTNERS

    SHARE CONTRIBUTION

    UNDISTRIBUTED SURPLUS

    DEPOSITS

    LOANS

    LOANS/ OVERDRAFTS

    TRADE CREDITS

    ENTRANCE FEES

    GRANTS

    Satisfaction within our means

    Satisfaction within our means

    WHY SACCOS EXPERIENCE DIFFICULTIES IN RAISING ADEQUATE FINANCE

    LIMITED AREA OF OPERATION/CLOSED MEMBERSHIP


    POOR SAVINGS CULTURE: CONCEPT OF NET
    BORROWERS VS NET SAVERS

    POOR RESERVE RETENTION AND CAPITAL BUILD UP

    Satisfaction within our means

    WHY SACCOS EXPERIENCE DIFFICULTIES IN RAISING ADEQUATE FINANCE

    Poor image/branding Poor pricing of products/low profitability


    Distribution of dividends ignoring capitalization concerns

    Satisfaction within our means

    SUGGESTED WAY FORWARD


    Long term savings products Liquidity retention
    Children and Youth Savings Create incentives for Net Savers vs Net Borrowers
    Take advantage of the new regulatory environment to build confidence

    PRODUCT DIVERSIFICATION

    ENCOURAGE SAVINGS

    REGULATORY ENVIRONMENT

    Satisfaction within our means

    SUGGESTED WAY FORWARD (cont)

    Have a broader outlook of membership

    AREA OF OPERATION

    The larger the membership base, the larger the capital base, ultimately the more the financial strength and stability

    Satisfaction within our means

    END THANK YOU JUNE 2011

    BY Daniel S.G.Masha Chief Executive Officer, Kilifi Teachers Sacco

    Satisfaction within our means

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