UNITED NATIONS SACCO SOCIETY LIMITED STRATEGIC PLAN 2015 - 2017 April 2015
UNITED NATIONS SACCO SOCIETY LIMITED
STRATEGIC PLAN 2015 - 2017
April 2015
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STRATEGIC PLAN 2015 - 2017
The UN SACCO has the mandate of providing financial services for the economic empowerment and social progress of its members. The SACCO intends to enhance this mandate by implementing this three year strategic plan, covering the period 2015-2017. Following the expiry of the strategic plan for the period 2012-2014, the board and management embarked on an all-inclusive process of developing a new plan for the period 2015-2017, taking into
account changes in the operating environment as well as the need to align the services with the membership financial needs.
Given the dynamic operating environment, emerging business trends and the determination to be the financial solutions provider of choice, the Board of Directors and the Management reviewed the SACCO’s operations structure and business focus in order to be competitive. They revised the Vision statement and retained the Mission Statements to benchmark with the market leaders in the financial services. The new Vision statement is “The financial solutions provider of choice”. The corresponding Mission Statement is “To uplift the social economic status of our members by offering them quality, affordable and diversified financial services”.
This plan has embraced the concept of the Balanced Scorecard performance management framework in its thematic areas to align our business activities and programs with the corporate objectives and strategies. The financial perspective has been addressed through focus on revenue growth, capital growth, loan book growth and cost optimization. The theme on customer service addresses membership growth, improved customer satisfaction, corporate image, new product development and improved information access by members. Internal business processes perspective focuses on improved operational efficiency, business processes automation, review of policies and procedure manuals, business continuity planning and increase in office space commensurate with business size. Finally, the learning and growth perspective focuses on enhancing the organizational capacity levels for members, board and staff. The plan therefore balances financial, human resource, business development and operational concerns.
The good aspirations of this Strategic plan can only be realized through an effective implementation. This will be facilitated through prudent talent management supported by appropriate systems and processes to offer quality service to our customers and ultimately enhance business growth.
I wish therefore to take this opportunity to emphasize the Board’s commitment to providing guidance and oversight role to ensure the goals of this strategic plan are realized. Finally, I take this opportunity to sincerely thank all those who participated in the development of this strategic plan. In particular, I acknowledge the valuable input of the Board, Supervisory Committee, the Ministry officials, Management and Staff.
Lastly we are highly indebted to the facilitative role and expert guidance provided by M/S Alpex Consulting Africa Limited during the preparation of this plan.
Samuel OlagoCHAIRMAN, BOARD OF DIRECTORS
FOREWORD BY THE CHAIRMAN
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PREFACE
The challenge that the Management faces is to ensure that this Strategic Plan is disseminated and owned by staff throughout the organization. Members of staff have the contributory responsibility of ensuring sustainable growth and prosperity of the SACCO. If we do not plan, we plan to fail .I am therefore happy to note that considerable time and resources have gone into developing this corporate road map. This Strategic plan takes cognizance of the changes
in the environment that are constantly impacting on the financial industry especially in the areas of technology, customer focus, and security and the critical need for sustainable growth.
In order to achieve our ambitious goals as set out in this strategic plan, our most important asset, human capital is expected to play a key role in developing an appropriate corporate culture that continuously embraces change based on dynamism in the operating environment. This will not only enhance productivity and facilitate radical improvements in the quality of customer service and corporate image but also improve shareholder value.
To enhance our mandate, customer/members are considered paramount and will therefore be a key area of focus during the strategic plan period. Processes and procedures will be streamlined and strengthened at all levels of the organization to ensure good corporate governance.
The Strategic plan targets improved financial performance through new revenue streams to expand the revenue base, outsourcing of non-core activities, cost management and institutionalization of risk management. Implementation of this strategic plan has been structured to ensure accountability at all levels with explicit expected deliverables for all activities within clear timelines. Sound performance targets have been set, backed with adequate budgetary provisions and supported by clear responsibility centres. For sustainable business growth, the plan will be implemented while continuously embracing our core values.
Monitoring and evaluation will be done at all levels of operation through a sound performance management system. Senior management will periodically review progress on the implementation of the plan while my office will submit quarterly reports to the Board of Directors.
I note with great expectation that the Strategic plan recognizes the integral need for deepening of partnerships with other service providers and also envisages closer collaboration with the regulator.
It is my conviction that with professionalism, teamwork, creativity, innovation and commitment during implementation and adequate support from all stakeholders, this 2015-2017 Strategic plan lays a strong foundation towards the realization of our Vision to be “The financial solution provider of choice”.
Clement Tongi,CHIEF EXECUTIVE OFFICER
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Table of ContentsFOREWORD BY THE CHAIRMAN II
PREFACE III
LIST OF TABLES V
LIST OF ABBREVIATIONS VI
EXECUTIVE SUMMARY VII
1.0 INTRODUCTION 91.1 CONTEXT OF THE STRATEGIC PLAN .................................................................................................... 91.2 BRIEF PROFILE OF UNITED NATIONS SACCO LTD ....................................................................... 91.3 RATIONALE FOR THE STRATEGIC PLAN ...........................................................................................111.4 METHODOLOGY USED IN DEVELOPING THE STRATEGIC PLAN .......................................121.5 STRUCTURE OF THE PLAN .......................................................................................................................12
2.0 SITUATIONAL ANALYSIS 142.1 THE SACCO AND DEVELOPMENT IN KENYA .................................................................................142.2 IMPACT OF THE SACCO SOCIETIES ACT ON SACCO SOCIETIES OPERATIONS .........142.3 KENYA’S ECONOMY AND DEVELOPMENT OUTLOOK .............................................................172.4 PERFORMANCE OF SACCOS 2013 ......................................................................................................182.5 CHALLENGES IN THE MANAGEMENT OF SACCOS ...................................................................192.6 PERFORMANCE OF UN SACCO LIMITED .........................................................................................212.7 COMPLIANCE LEVELS FOR UN SACCO LIMITED ........................................................................222.8 CUSTOMER ANALYSIS ................................................................................................................................232.9 SWOT ANALYSIS OF UN SACCO LTD .................................................................................................232.10 STAKEHOLDER ANALYSIS .........................................................................................................................252.11 COMPETITOR ANALYSIS ............................................................................................................................282.12 RISK ANALYSIS .................................................................................................................................................28
3.0 STRATEGIC FRAMEWORK 303.1 INTRODUCTION .............................................................................................................................................303.2 VISION ..................................................................................................................................................................303.3 MISSION ..............................................................................................................................................................303.4 CORE VALUES ...................................................................................................................................................303.5 SUMMARY OF STRATEGIC THEMES ....................................................................................................30
3.6 SUMMARY OF STRATEGIC OBJECTIVES 31
4.0 IMPLEMENTATION OF THE PLAN 324.1 INTRODUCTION .............................................................................................................................................324.2 IMPLEMENTATION APPROACH .............................................................................................................334.3 IMPLEMENTATION MATRIX ......................................................................................................................34
5.0 FINANCIAL REQUIREMENTS 48
6.0 MONITORING AND EVALUATION 49
ANNEXES 49ANNEX 1: FINANCIAL TRENDS AND PROJECTIONS FOR 2015-2017 .............................................49ANNEX 2:: MONITORING AND EVALUATION FRAMEWORK .................................................................53
TABLE 1: UN SACCO PRODUCT PORTFOLIO 10
TABLE 2: PERFORMANCE TREND OF DEPOSIT TAKING SACCOS (KSHS ‘000,000) 17
TABLE 3: PERFORMANCE OF UN SACCO LTD 2011-2014 19
TABLE 4: COMPLIANCE LEVELS FOR UN SACCO LTD 20
TABLE 5: UN SACCO LTD SWOT ANALYSIS 21
TABLE 6: OPPORTUNITIES AND THREATS FOR UN SACCO 21
TABLE 7: UN SACCO STAKEHOLDER ANALYSIS 23
TABLE 8: COMPETITIVE ANALYSIS OF PLAYERS IN THE FINANCIAL SECTOR 25
TABLE 9: RISK ANALYSIS 26
TABLE 10: SUMMARY OF THEMES AND OBJECTIVES 29
TABLE 11: MEMBERSHIP GROWTH MATRIX 32
TABLE 12: BUSINESS GROWTH MATRIX 40
TABLE 13: CORPORATE GOVERNANCE MATRIX 44
TABLE 14: FINANCIAL REQUIREMENTS SUMMARY 47
List of Tables
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ADM Annual Delegates MeetingAGM Annual General MeetingBCP Business Continuity Plan BOD Board of DirectorsBSC Balanced Score CardCBR Central Bank RatesCCA Core Capital to Asset (Ratio)CCD Core Capital to Deposit (Ratio) CEO Chief Executive OfficerCRB Credit Reference BureauDTS Deposit Taking SACCOsEAC East African CommunityERP Enterprise Resource PlanningGDP Gross Domestic ProductHOC Head of CreditHODs Heads of DepartmentsHOF Head of FinanceHOM Head of MarketingICT Information Communication TechnologyIFRS International Financial Reporting StandardsKES Kenya ShillingKYC Know Your CustomerM&E Monitoring and EvaluationMFI Micro Finance InstitutionPESTEL Political Economic Social Technological Ecological, Legal (Analysis)SACCO Savings and Credit and Cooperative Societies SASRA SACCOsSocietiesRegulatory AuthoritySWOT Strengths Weaknesses Opportunities Threats (Analysis)ToR Terms of ReferenceUN United NationsIAS International Accounting StandardsSC Supervisory CommitteeNACOS National CooperativesFOSA Front Office Services ActivitiesBOSA Back Office Services ActivitiesUNFCU United Nations Federal Credit Union
LIST OF ABBREVIATIONS
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The United Nations Co-operative Savings and Credit Society (UN SACCO) was started in 1975 with the objective of providing a mechanism for United Nations (UN) employees in Kenya to save and borrow at low cost in order to meet the employees’ socio-economic needs. The UN SACCO membership has grown from 131 members in 1975 to above 4,700active members in 2014. In the same period, members’ deposits have grown from Kshs. 290,000 to Kshs7.10 billion.
The membership of the SACCO is open to all local and international staff of UN agencies. Therefore, as part of the effort to strengthen the performance of UN SACCO and continue to offer value to its members as well as respond to the ever changing socio-political and economic environment, there is need to develop a strategic plan to guide the growth and sustainable development of the institution in the SACCO’s competitive environment in Kenya.
Over the past three years the SACCO has seen great achievements that include but not limited to reduced turnaround time for loan processing; reduced costs and fraud incidences; Portfolio diversification; Increase membership from the Diaspora and Savings account balances doubled. Some of the challenges include Strict compliance requirements by SASRA; Short term nature of UN SACCO members employment contracts made management of loans difficult; Fraud Cases; Inadequate office facility; Drastic changes in Board and Management; Poor communication to members; Weak governance- interference of Board with day to day operations and Incomplete Know Your Customer (KYC) data making defaulter recovery difficult.
The SACCO embarked on a process to develop a new strategic plan that would ensure that the challenges are addressed and the opportunities in the market are exploited. The process was participatory and involved all the key stakeholders and the staff of UNSACCO.
The three year business plan is anchored on changing the business model of the SACCO to achieve three broad outcomes that include improved governance (and compliance), business growth and expansion and growth of membership of the SACCO.
The SACCO’s Vision is the financial solutions provider of choice while the mission is to uplift the socio-economic status of our members by offering them high quality, affordable and diversified financial services. The SACCO shall be guided by the values of Teamwork, Accountability, Customer focus and Integrity.
The strategic plan is anchored on four strategic themes of membership diversification; corporate governance; business growth and compliance. Several objectives have been developed for the achievement of the strategic themes.
Implementation of the strategic plan shall be through the Balanced Score Card approach. The various objectives under each of the BSC perspectives include:-
PERSPECTIVE OBJECTIVES
Financial Loan book growth;Grow deposit base;Revenue growth;Cost optimization; andGrowth of core capital
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Customer Increase membership to 10,000;Enhance retention of members; and Improve customer satisfaction
Systems and processes New product development;Business process automation;Review Policy & procedure manuals;Creation of adequate office space;BCP (Business continuity) implementation; andImprove operational efficiency
Learning and growth Capacity building of staff, board and members;Ensure compliance with SASRA Ratios;Enhance information access for customers; andImprove Corporate image of the SACCO
Several strategic initiatives have been identified towards the achievements of these objectives. Implementation of the strategic plan shall use the Balanced Score Card Approach and the plan shall be cascaded downwards to individual employees to ensure there is a link between their day to day work and the organizational strategy. Implementation is expected to cost KES 1.123 billion over the three years. Over the same period the SACCO is expected to grow its revenues and capital by 15% and also increased investment opportunities for members. This will finally translate into higher returns for members while at the same time ensuring compliance with prudent standards.
EXECUTIVE SUMMARY
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INTRODUCTION
1.0 INTRODUCTION
1.1 Context of the Strategic PlanSaving and Credit Co-operative Societies (SACCOs) are seen as vehicles for resources mobilization and gateways to economic prosperity for families especially those in the lower and middle-income categories. These enterprises handle large sums of member funds in the form of deposits, shares and interest. The management of SACCO funds is as such a topical issue in the co-operative movement and among policy makers. The SACCO sub-sector in Kenya has witnessed rapid growth in the last few years at the rate of about 25% per annum and currently boasts of a savings mobilization of over KES400 Billion and an asset base of over KES300 billion as at December 2013. The savings mobilized represent 48% of the national savings.
SACCOs have therefore played a key role in the mobilization of financial resources and are regarded as major players in the realization of Kenya’s development blue print, Vision 2030. The SACCO sub-sector therefore occupies a strategic position in the socio-economic development of Kenya. The Kenyan Co-operative sector is rated the best with the highest resource mobilization in Africa and seventh in the world according to a survey carried out by the International Co-operative Alliance (ICA). The co-operative values and principles have withstood the test of time and offer the best model for fighting poverty and inequality in society. Co-operatives are therefore the best vehicle for driving socio-economic development in the country.
The enactment of the SACCO Societies Act has made provisions for licensing, regulation, supervision and promotion of SACCO Societies through the establishment of the SACCOSocieties Regulatory Authority (SASRA). In addition, the Act provides for protection of members deposits by creating a Deposit Guarantee Fund. The Act is therefore intended to enhance transparency, accountability and good corporate governance in the management of SACCOs.
Therefore, as part of the effort to strengthen the performance of UN SACCO and continue to offer value to its members as well as respond to the ever changing socio-political and economic environment, there is need to develop a strategic plan to guide the growth and sustainable development of the institution in the SACCO’s competitive environment in Kenya.
1.2 Brief profile of United NationsSACCO Ltd
1.2.1 HistoryThe United Nations Co-operative Savings and Credit Society (UN SACCO) was started in 1975 with the objective of providing a mechanism for United Nations (UN) employees in Kenya to save and borrow at low cost in order to meet the employees’ socio-economic needs. The UN SACCO membership has grown from 131 members in 1975 to above 4,700active members in 2014. In the same period, members’ deposits have grown from Kshs. 290,000 to Kshs7.1 billion. The membership of the SACCO currently includes local and international staff of UN agencies, spouses and dependants of the staff of UN, Diplomatic staff and staff of International Organizations affiliated to the UN operating in Kenya.
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1.2.2 Mandate UNSACCO Ltd derives its mandate from the Co-operative Societies Act 2004 and the attendant Rules, the SACCO Societies Act, 2008, the SASRA Regulations and the SACCO’s Bylawswhichguides its operational management. These regulatory frameworks enable the SACCO to facilitate the promotion of economic and social interests of members, in accordance with the co-operative principles that include voluntary and open membership; democratic member control; economic participation by members; autonomy and independence; education, training and information; co-operation among co-operatives; and concern for community in general.
A SACCOis therefore organized to undertake the following functions: i) Encourage thrift among its members by affording them an opportunity to accumulatetheir
savings; ii) Create a source of funds at a fair and reasonable rate of interest; iii) Provide an opportunity for each of its members to improve the members respective
economic and social conditions; iv) Provide members with credit for purposes of providence or production or both; v) Offer to the members complementary savings and credit services and other financial products
as may be required by the members from time to time; vi) Ensure safety and soundness of the member’s funds through a risk management programme
or appropriate insurance coverage; vii) Ensure the progress of its members by educating them continuously on the proper use of
credit; and viii) Perform the functions and exercise the powers designated for savings and credit cooperative
societies under the applicable law for the benefit of the members.
1.2.3 Products and Services UNSACCO Ltd offers the following products and services to its members: Table 1: UN Sacco Product Portfolio
Loan Products Savings Products Other Services• Normal Loan • FOSA Savings Account • EFTs
• Premium Loan • Fixed Deposit • RTGS
• Education • Children’s account • MSACCO
• Emergency • Chama Account • Bankers cheques
• Instant • ATM services
• FOSA Salary Advance • Safe custody services
• Motor Vehicle Loan
• Secured Asset Loan
• Retiree Loan
• Settling down Loan
• Insurance premium financing
• Festive season Loan
INTRODUCTION
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1.2.4 Achievements over the last three yearsThe SACCO made the following strategic achievements over the last plan period:-1. Reduced turnaround time for loan processing from 72 hours to 48 hours;2. Higher dividends to members;3. Reduced costs and enhanced control systems;4. Portfolio diversification;5. Increase membership from the Diaspora;6. Junior account growth;7. Critical business systems uptime maintained at over 95%;8. Savings account balances doubled;9. Commencement of implementation of a Document Management System; and10. Growth in interest on deposits
1.2.5 Gap AnalysisThe SACCO had planned to undertake some activities in the last plan period. The key activities that have not been implemented include:1. Automation of procurement processes;1. Increase in member education;2. Compliance in financial reporting;3. Construction of a UN SACCO Plaza;4. Formulation of policies to guide operations;5. Establishment of a salaries account;6. ICT Data recovery site;7. Customer Relationship Management System not yet established;
1.2.6 ChallengesThe following challenges and constraints were encountered during the plan period:1. Strict compliance requirements by SASRA;2. Short term nature of UN SACCO members employment contracts made management of loans
difficult;3. Incidences unethical practices;4. Inadequate office facility;5. Drastic changes in Board and Management;6. Poor communication to members;7. Incomplete Know Your Customer (KYC) data making defaulter recovery difficult.
1.3 Rationale for the Strategic PlanThe development of Strategic Plans is expected to result into the realization of the following benefits to SACCOs:1. Increased organizational effectiveness and efficiency resulting from the development of a clear
strategic direction through the formulation of corporate goals and objectives. This practice will thus allow for prioritization of resource allocation by making strategic choices;
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2. Provides a framework for evaluating alternative strategies. Since the planning process includes participative discussions touching on all functional areas of the organization, the deliberations provide the planning team and participants with a clear understanding of the business key success factors and operational issues.
3. An improved mechanism for stakeholder participation and motivation. This is achieved through effective internal and external communication that is used during the strategy analysis, formulation, implementation, and evaluation. This therefore stimulates positive response from the various stakeholders of UN SACCO Ltd as it results into a feeling that they are part of a team that is focused on a specific purpose and mission.
4. Provides the functional managers and operational staff members with an opportunity to broaden their viewpoint and grow with the organization. This practice further helps to ensure sustainability of activities and allow for diffusion of strategic management mind set and culture in the organization.
5. Provides a framework for effective monitoring and evaluation of corporate, functional, and individual performance.
The development of a three year strategic plan for UNSACCO has been necessitated by the following factors: -1. Expiry of the 2012-2014 Strategic Plan;2. Changes in the operating environment that have been brought about by regulation, changes in
the economy, increased demand for SACCO services and the increased cost of doing business.3. Increased competition from banks, microfinance institutions and other SACCOs.4. Rapid Changes in technology meaning that the SACCO has to realign itself to the emerging
technological challenges.
1.4 Methodology used in developing the strategic planDevelopment of this strategic plan was inclusive and participatory and it entailed the following key activities;-1. Meetings with management to agree on the scope and methodology to the used in the process
of developing the plan.2. Meetings with top management to agree on strategic direction for the SACCO.3. Review of Documents including the SACCOs annual reports, strategic plan, SASRA reports,
Vision 2030 and other relevant publications.4. Use of questionnaire for the Board, Supervisory Committee, management and staff to capture
successes, challenges and lessons learnt. Proposed strategic direction for the SACCO was also captured using the questionnaires.
5. Three day strategic planning retreat for board and management to build consensus on SWOT, PESTEL, Strategic themes, objectives, performancetargets and indicators for the planning period.
1.5 Structure of the planThe strategic plan is divided into five chapters. Chapter one looks at the background of UN SACCO and the context within which the plan is developed including rationale and methodology. Chapter
INTRODUCTION
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two looks at the operating environment for UNSACCO Ltd. Including an analysis of the macro-economic environment, regulatory environment, competitor analysis and the internal operating environment. Chapter three presents the strategic model for UNSACCO Ltd. Including the vision, mission, core values and the issues and strategic objectives for the next three years.Chapter four looks at the implementation framework which identifies specific actions to be taken to achieve the strategies, institutional arrangements(current and required), capacity development issues and financing of the plan. Finally chapter five looks and the monitoring and evaluation of the plan to ensure the desired goals are achieved.
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SITUATIONAL ANALYSIS
2.0 SITUATIONAL ANALYSIS
2.1 The SACCO and Development in KenyaCo-operatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. In the tradition of their founders, cooperative members believe in the ethical values of honesty, openness, social responsibility and caring for others.
The co-operative principles are guidelines by which co-operatives put their values into practice.
These are: 1. Voluntary and open membership: Co-operatives are voluntary organizations, open to all
persons able to use their services and willing to accept the responsibilities of membership with no discrimination against others.
2. Democratic member control: Co-operatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions.
3. Member economic participation: Members contribute equitably to and democratically control the capital of their co-operative and allocate surpluses for developing the co-operative, benefiting members in proportion to their participation and contribution.
4. Autonomy and independence: Co-operatives are autonomous, self-help organizations controlled by their membership. They enter into agreements or raise capital on terms that ensure democratic control of their members.
5. Provision of education, training and information: Co-operatives provide education and training for their members, elected representatives, managers and employees so they can contribute effectively to the development of their co-operatives, and inform the public on the nature and benefits of co-operatives.
6. Co-operation among co-operatives: Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local and international structures.
7. Concern for the community: While focusing on member needs, co-operatives work for the sustainable development of their communities through policies accepted by their members.
SACCOs have played an important role in the development of the Kenyan economy that has led to the uplifting of the standards of living of the people. Through their SACCOs, members are able to access quality education and Medicare, funds for enterprise development, home purchase or construction and many other financial benefits. Due to the rapid growth, and the Government of Kenya’s commitment to established SACCO legislation and to implement international financial performance standards it begun supervision of SACCOs with the sole aim of providing the incentive for improvement of SACCO management and performance.
The critical role of SACCOs has been recognized under Vision 2030 as that of mobilization of savings for investments. It is therefore expected under the new SACCO legislation and adoption of prudential regulations growth of SACCOs will quickly improve. The SACCO movement has entrenched the culture of savings to Kenyans which is a pre-requisite for wealth creation. SACCO savings have also helped employees into their retirement. Like other co-operative societies, SACCOs are governed by
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SITUATIONAL ANALYSIS
the Rochdale principles, which include democratic control by the members. The membership elects a Board of Directors which is responsible for managing the affairs of the SACCO.
According to SASRA, as at 31st December 2013 the total number of Deposit Taking SACCOs was 215 of which 135 had been licensed. 80 SACCOs were at various stages of analysis and processing. It should be noted that these Deposit Taking SACCOs were in operation prior to establishment of SASRA in 2009 and have applied to be considered for licensing as Deposit Taking business. The licensed Deposit Taking SACCOs that are spread across the Counties are distributed as follows:-Government based SACCOs 27, Farmers based SACCOs 44, Teachers Based SACCOs 32, Private institutions based SACCOs18, and Community based SACCOs14.
According to SASRA, membership grouping of DTS is changing due to the competitive pressure and the need to open new growth opportunities beyond traditional membership sources. The SACCO industry has seen the opening up of the common bond where for example a teacher’s based SACCO is serving farmers, business persons and other members of the society. Rebranding and change of names is accompanying this and so far a total of 47 DTS have changed names. However, opening up of membership introduces new business risks including the guarantee mechanism whose strength is anchored on social collateral becoming less effective. (Source: SACCO Supervision Report, 2013)
2.2 Impact of the SACCO Societies Act on SACCO Societies OperationsThe SACCO Societies Act 2008 has caused a paradigm shift in the way SACCO Societies perform their operations.1. It has created a regulatory mechanism where SACCO Societies areregulated under the oversight
of the SACCO Societies Regulatory Authority.2. SACCOs are recognized as formal and regulated entities 3. They are licensed, regulated and supervised by SASRA4. The deposits of the SACCOs will be guaranteed under a Deposits Guarantee Fund5. Committed to good governance and best practices 6. Well capitalized to withstand financial crises and to grow their business 7. Share credit information 8. Regulate dispute resolutions between SACCOs and SASRA 9. Ensure SACCOs invest in productive and core areas. (Investment Policy) 10. SACCOs shall be more effective and efficient by:
• Upgrading the Management Committee to Board of Directors • Developing policies like the Credit Policy, Human Resource Policy, Risk Management Policy,
etc. • Adopting Prudential Standards • Adopting International Financial Reporting Standards (IFRS)• Investing and more use of ICT in their operations • Pay for the cost of regulation
The SACCO regulations emphasize that in accordance with Vision 2030, the policy objective of establishing prudential regulation of deposit taking SACCO societies is to enhance transparency and accountability in the SACCO subsector. This is consistent with theon-goingreforms in the financial
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sector whose ultimate aim is to expand financial access,encourage efficiency and enhance financial stability of financial service providers in Kenya.
The Regulations require that SACCOs meet the following thresholds:-
1. Capital Adequacy (Reg. 9-12)The SACCO shall have a minimum of:Core capital of 10% of total assets; Core capital of 8% of total deposits; Institutional capital of 8% of total assets and The SACCO may not distribute surplus if capital adequacy ratio is not met
2. Liquidity and Asset/Liability Management (Reg.13-20)The SACCO shall formulate a liquidity policy; have 15% of its deposits maintained in liquid assets; Liquid assets not used immediately may be invested in call deposits in Banks, NACOS or SACCOs under the Act ; Board to prepare contingency liquidity plan; Average monthly balances report to be prepared weekly and a liquidity statement return shall be submitted to SASRA monthly.
3. Shares, Savings and Deposits (Reg. 21-27)The SACCO shall formulate a shares, savings and deposit policy; minimum shares;- The SACCO shall specify amount of shares to become a member; Shares are transferable but not refundable; Shares may earn dividends if surplus is made by the SACCO; Deposits shall be used to secure loans. May be refunded on withdrawal within 60 days; Savings disclosure; - Terms and conditions of operating accounts shall be disclosed. Additionally, Dormant Accounts;- Savings accounts not operational for six months; Abandoned savings;- Unclaimed dormant accounts deposits over six months and up to five years in the SACCO and Transfer to Public Trustee;- After five years abandoned savings are transferred to Public Trustee.
4. Credit ManagementThe SACCO shall operate a credit policy and loan`s granting manual; The policy shall describe loan granting and recovery procedures, eligibility, collateral, turnover appraisal e.t.c.
5. Approvals: - SACCOs shall seek approval on accepting deposits; Opening of new branches; Operating an agency business; Relocating business; Closure of business and Introduction of new products
6. Prescribed policy documents for SACCOs shall include; Credit policy; Savings policy; Business plans; Investment policy; Members register;Disaster preparedness plan; Information preservation policy and Record for dormant members
7. Prohibited business shall include: Foreign trade; Trust operations; Investing in enterprise capital beyond prescribed limits; Underwriting or placement of securities and Land acquisition other than for purposes of expanding business.
SITUATIONAL ANALYSIS
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Additionally, after three years of implementation challenges have been identified and lessons learnt have been documented. To ensure efficiency and effectiveness in the sector, the SACCO Societies Regulatory Authority (SASRA) has proposed a raft of changes in the policy and regulatory environment. This will in the long run affect how SACCOs shall conduct their businesses. They include:-
a. Capital Adequacy: introduction of total capital and supplementary capital as a capital adequacy measurement in consistent with the Act. This will encourage innovation in raising capital by the DTS and also encourage making general provisioning for performing loans.
b. Equity Investments: proposes to amend regulation 48(4) pursuant to section 38 of the SACCO Societies Act to prescribe the maximum proportion for equity investments by a SACCO.
c. Investment property: remove limitations on investment in properties by providing a definition that incorporates IAS 40 such that the non-earning component of investment in land and buildings will be limited to the portion occupied by the SACCO for own usage.
d. Credit information sharing: amendments of the law to allow sharing of information with other licensed financial institutions including the sharing of full file information through licensed CRBs.
e. Development of a central liquidity system and participation in the national payment system to help SACCOs address short term liquidity borrowing needs in acost effective and sustainable manner.
f. Criteria for suitability of officers of SACCOs: amendments that seek to provide for minimum criteria for assessing the fitness and propriety of senior officers of SACCOs, which include members of the Board of Directors and senior management.
2.3 Kenya’s Economy and Development OutlookAccording to the Economic Survey, 2014, the world economy grew by 3.0% in 2013 against a revised projection of 3.1%. The lower performance was observed across most regions and major economic groups. However, the economy was expected to turn around in 2014. Growth in Sub-Saharan Africa and the East African Community (EAC) however remained relatively robust with real GDP estimated to have expanded by 5.0% and 6.1% respectively in 2013. This was due to an increase in trade and investment with emerging market economies.
Domestically, the country’s Gross Domestic Product (GDP) expanded by 4.7% in 2013 compared to 4.6% in 2012. The performance was supported by a stable macroeconomic environment; low and stable inflation supported by improved supply of basic foods; lower international oil prices and reduced costs of electricity; infrastructural development and the construction sector.
Overall, Kenya’s economy was resilient in 2013 despite elections with Agriculture, Transport and communications and manufacturing recording growths of 2.9 %, 6.0% and 4.8% respectively. Growth was also recorded in Financial Intermediation (7.2%), Construction (5.5%), wholesale and retail trade (7.5%) and electricity and water (5.9%). In the Financial sector, the annual average inflation rate declined to 5.7 due to largely availability of basic foodstuffs and stable domestic prices of petroleum products. Central bank interest rates reduced from 11.0 to 8.50 in the first half of 2013. The overdraft and maximum lending interest rates dropped by 1.28 and 1.16 percentage points, to 26.51% and 16.99% largely due to lower inflationary pressure and the Central Bank Rate (CBR) reduction.
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STRATEGIC PLAN 2015 - 2017
However, despite the growth, the performance was lower than projected. This was mainly due to : depressed performance of the rains that affected the agriculture sector; decline in exports; comparably higher interest rates; reduced spending by government agencies (transition period); risk aversion in the build up to the elections and insecurity concerns.
For 2014 and beyond, the macroeconomic stability is expected to prevail; operationalization of development budgets in counties will spur economic growth while private consumption is also likely to improve given the stable interest rates and low inflation regime. Additionally, recent discoveries of oil and natural gas are likely to trigger more foreign direct investments inflows. The manufacturing sector’s performance is projected to maintain its current growth path given the positive growth within the region. Similarly, the financial intermediation sector is likely to maintain its momentum on account of enhanced performance and innovations in the sectors. Investments in the construction industry is likely to remain robust against a background of stable interest rates coupled with ongoing government infrastructural projects and the private sector’s resilient participation especially in the real estate development(Economic Survey, 2014).
Implications on SACCOsCooperative financial institutions tend to be more stable in times of crisis, as their investment patterns use the capital of members in ways that best serve their long term needs and interests. They have a lesser tendency to invest in high risk financial markets compared to commercial banks. It is therefore thought that their comparative stability, under both average and extraordinary conditions, can help to mitigate crisis impact for members and clientele, especially in the short-term. However, since most SACCOs draw their membership from the formal sector, in times of economic downturn, the functioning of the SACCO can be undermined if member’s incomes are destabilized by volatility in the economy. This may lead to reduction of members’ savings and an increased demand for loans. SACCOs have reported increase in demand for loans, but have exercised caution in responding to requests.
SACCOs are generally guided by a conservative lending philosophy that places member needs ahead of institutional profits. This restricts them from engaging in high risk lending practices, distinguishing them from other financial institutions and has shielded them from financial upheavals that continue to face the commercial banking sector.
2.4 Performance of SACCOs 2013According to the SACCO Supervision Report 2013, the number of licenseddeposit taking SACCOs (DTS) grew to135 with a membership of 2.6 million. Deposits grew to KES 172 billion while total assets grew to KES 241 billion. It is expected that the number of licensed deposit taking SACCOs will grow considering that there were 80 applications that had not yet been approved. This shows that despite increased competition from other players in the financial markets, the sector has remained resilient and has continued to register growth.
The report further states that DTS sustained efforts to attract deposits through sustained aggressive marketing, new products and innovations such as partnerships with banks to offer cheques and other value adding services to members. All licensed DTS are now connected to SACCO Link, automated
SITUATIONAL ANALYSIS
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United Nations SACCO Society Limited • Your Financial Anchor 19
STRATEGIC PLAN 2015 - 2017
teller machines by Cooperative Bank while 11 DTS had integrated mobile financial services to their core SACCO Systems.
It is also important to note that external borrowing relative to the assets declined indicating shifting funding strategies by DTS in line with prudential norms. There was also increase in capital through issuance of shares and retention of surplus.
Overall, DTS constitute over 72% in key financial indicators of the entire industry in terms of membership, assets, loans, deposits and capital an indication of the soundness of the entire SACCO industry. The subsector remains relatively financially stable as supported by compliance with the minimum prudential requirements in capital, liquidity, improved asset quality and overall earnings. (Source: SASRA, 2014)
The table below shows the performance trends for the period 2012-2013.
Table 2: Performance Trend of Deposit Taking SACCOs (Kshs ‘000,000)
Performance Item 2013 2012 % Change
Total Assets 241,622 207,291 17%
Deposits 172,526 149,169 16%
Total Capital 31,156 23,886 30%
Loans 184,539 28,403 17%
Turnover 33,715 28,403 19%
Membership 2.6 2.3 13%
Source: SACCO Supervision Report 2013
2.5 Challenges in the Management of SACCOs
2.5.1 At Board Level The Board oversight and management operational responsibilities are inadequately defined in the by-laws. The major concerns include: • Some of the elected board members would frequently be non-professional volunteers yet they
assume highly technical responsibilities such as loan analysis and disbursement, budgeting and financial expenditure control.
• Lack of clear guidelines on where, for example the Credit Committees authority ends and where the Executive Committee begins, and where the staff members authority begins hence delayed decision making.
• Board members succumbing to political pressure from external forces to implement activities that counter the management ethics and standards.
• Unrealistic office tenure that ends up being costly in mainstreaming governance interventions in respect of training and instilling professionalism
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• Board members and Supervisory Committee may collude to protect one another’s interests, e.g. insider loans and high managers’ salaries.
2.5.2 At Staff Level • Weak terms and conditions of service leading to job insecurity and poor performance • Unprofessional process of recruitment that encourages favourism, tribalism, and nepotism
sometimes attracts incompetent personnel • Absence of appropriate personnel, administration and accounting policiesand procedures,
human resource manual, job descriptions, specifications, and performance appraisal tools compound the problems of governance.
2.5.3 At Member Level • Inadequacy of resources and lack of Education and Training force members to exert pressure on
the Board members to implement issues in a manner that abuses thespiritof good governance• Salaries for the staff are not as competitive as those paid to other financial institutions because
members reject offering salaries that appear higher than what they earn from their employers. This makes attracting and retaining better-qualified managers difficult.
• During periods of phenomenal growth of the SACCO, members fail to look closely at the prudential actions of their Board members.
• The one member one vote principle at times undermines the genuine concerns of the minority. The academic and patronage criteria are at times overlooked in favour of other minor considerations.
2.5.4 ICT ChallengesIntense competition, reduced margins and increased customer expectations have largely compelled MFIs to adopt new technologies. Technology cannot be ignored any longer as it is sweeping through the financial services industry. Its adoption has largely improved the outreach by Micro- finance institutions, improved efficiency and brought about flexibility in operations. Most SACCOs have introduced mobile money transfer platform as one of their products and are thus thinking on how to use the facility to enhance their Microcredit operations. The benefits resulting from the adoption of technology include enabling SACCOs to: Offer more services; establish and strengthen the relationship with its customers; develop new products in response to the changing market needs that are a key factor in retaining customer loyalty; diversify delivery channels; enable better management of risks; provide online real-time customer information which is available throughout and any change is reflected throughout the SACCO immediately; provide customer delight - customers are provided with a quick, unified view of their account information and achieve higher employee productivity.
2.5.5 Capital Adequacy• Most SACCOs cannot meet the minimum capital requirements and ratios• Lack of separation between capital and members deposits• Difficulties in comprehending constitution of the core capital and subsequent calculation of
the capital ratios
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United Nations SACCO Society Limited • Your Financial Anchor 21
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2.5.6 Liquidity Ratios• Overdependence on short term external borrowings• Lack of good systems to enable submission of liquidity returns• Unwillingness to disengage from prohibited business
2.5.7 Credit Management• Lack of comprehensive loaning policy that conforms to requirements• Inability to generate member statements as required• SACCOs have surpassed the regulatory requirement of minimum external borrowing of 25% of
the total assets• High level of non-performing loans
2.5.8 Investments• Too much focus on investment in properties and buildings• Investments have gone beyond regulatory requirements• Unwillingness to divest and focus on core business of serving members• Acquisition of large parcels of land that are not being utilized• Engagement in foreign trade
2.6 Performance of UN SACCO LimitedThe performance of UN SACCO Limited for the last three years is summarised in the table below:-
Table 3: performance of UN SACCO Ltd 2011-2014
Performance Area 2011 2012 %
Change 2013 % Change 2014 %
Change
Active membership 3,944 4,088 4% 4,387 7% 4,731 8%
Total Assets 5,610,570,727 6,547,006,193 17% 7,553,609,809 15% 8,820,121,311 17%
Deposits 4,724,584,873 5,374,384,513 14% 6,231,636,509 15% 7,158,079,069 15%
Loans 4,832,582,691 5,840,225,640 21% 6,453,383,482 10% 7,019,226,729 9%
Investments 11,036,250 14,626,214 33% 6,318,326 -57% 9,562,738 51%
Core Capital 255,602,169 392,364,230 54% 465,587,345 19% 1,000,814,506 115%
Share Capital 139,773,843 216,095,197 55% 260,024,554 20% 461,253,733 77%
Institutional Capital 115,828,326 176,269,033 52% 205,562,791 17% 539,560,773 162%
Total Revenues 775,932,543 960,941,197 24%
1,057,257,016
10% 1,231,177,970 16%
Employees 10 19 90% 17 -11% 19 12%
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From the table it is evident that between 2011 and 2013 the Society has been able to record significant growth in membership, loans, deposits which has in turn resulted into a large surplus that gives an opportunity for investment.
2.7 Compliance levels for UN SACCO LimitedAs indicated earlier, the SACCO Regulations have identified key areas that SACCOs are required to comply with to make them viable businesses and provide required benefits to members.
Loans and advances to total assets ratio stood at 80% for the year 2013 compared to 90% for the year 2012. The loans and advances constitute the largest portion of the SACCO assets. However, the growth patterns exhibited by the loans and advances indicate a decline from 20.53 in 2012 to 10.54 in 2013. Further, interest income from loans declined from a growth rate of 20.13 in 2012 to 15.48 in 2013. This is a direct effect of having a huge portion of net savers. However, SASRA observes that these category demands for huge returns on savings while the SACCO is not generating sufficient interest on loans to meet this demand because of low uptake of loans. There is therefore need to review strategies and policies that will ensure an appropriate balance while fully complying with regulatory requirements. Secondly, the regulator notes that the SACCO pays high interest rebates and this is heavily burdening the SACCO leading to a decline in the growth of the Core Capital. This, the regulator notes is because the capacity to generate sufficient capital is linked to the ability to retain adequate earnings as an efficient, competitive and sustainable business strategy.
On capital adequacy, the table below shows the performance and compliance of UN SACCO:
Table 4: Compliance levels for UN SACCO ltd
Performance in KES
Particulars Stds 2010 2011 2012 2013 2014 Remarks
Core Capital 10m 203.7 m 255.6m 392.4m 465.6m 1.00 B Compliant
Core Capital to Assets Min. 10% 4% 5% 6% 12% 14% Compliant
Core Capital to Deposits Min 8% 5% 5% 7% 8% 14% Compliant
Institutional Capital to Assets Min 8% 2% 2% 3% 3% 6% Non- Compliant
From the performance listed above, the SACCO is yet to comply on capital adequacy, one of the key prudential requirements. Regulation 84(1)(c) on transitional provisions provides that a SACCO shall build up its core capital of not less than 4% of the total assets which shall graduate to 10% by the fourth year. The performance of the SACCO indicates that the SACCO is still at 7.4% which is way below the required standard. One of the key contributors to the above is the lack of the required policies that would ensure all the financial ratios are met as required by law.
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2.8 Customer AnalysisThe UN SACCO draws its membership mainly from the staff and spouses of members of staff of the different UN Agencies located in Kenya and beyond. The membership draws from both international and local staff. Generally speaking therefore, the SACCO serves members with relatively good incomes. Operations of the SACCO are however currently restricted to the office located within the UN complex in Nairobi, Kenya. The SACCO membership is also open to staff of diplomatic missions and staff from international organizations affiliated to the UN and operating in Kenya. However, there is need to reach out into this huge market that remains largely unexploited.
2.9 SWOT Analysis of UN SACCO LtdThe Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis of UN SACCOLtdare analysed below:
Table 5: UN SACCO Ltd SWOT Analysis
STRENGTHS WEAKNESSES
• Clear demarcation between the board and management roles
• Poor communication between Board and staff
• Lateral coordination between staff and CEO • No succession plan in place for Board and Management
• Efficient ERP system • No clear career progression for staff members
• Document Management System in progress • Inadequate ICT staff capacity
• Open office set-up which allows for consultations
• Lack of an Enterprise-wide Risk Management Framework
• Staff Roles well defined • Execution and monitoring of Board resolutions is ineffective
• Skilled manpowerr • Inadequate Staff Motivation
• Secure location • skills mix at board level missing
• Well defined market • Inadequate of adequate sector exposure for board and management staff
• High liquidity • Non compliance in key indicators
• Shared Values • Inadequate communication to members
The Opportunities and threats were drawn from the PESTEL analysis where potential opportunities and threats to UN SACCO were identified.
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STRATEGIC PLAN 2015 - 2017
Table 6: Opportunities and Threats for UN SACCO
ISSUE OPPORTUNITIES THREATS
ECONOMIC
High Inflation • Increases investment in government papers hence high income returns.
• Reduces savings• Reduces demand in loans.
Low Inflation • Stability in the market especially in expenditure when doing large and long investment.
• More savings due to more disposable income.
• Reduced income from alternative investments e.g. government papers.
Fluctuating Currency • Lending in dollar denominated currenc
• Lose of members who may opt to deal with other credit unions for example UNFC
Global economic changes
• Positive growth increases funding to UN agencies hence more members for recruitment.
• Negative growth affects funding to UN agencies hence less employment and members for recruitment
POLITICALPolitical instability • More borrowing by locals for
resettlement• Relocation of UN offices to
other countries
• Increased borrowing on assets due to enhanced property value in the county towns and ease of charging process.
• Increased investment opportunities in the counties open avenues for partnerships.
• Up take of loans for investments in devolved towns.
• Laws in different counties can affect operations
SOCIAL
Member preferences • New market opportunities for membership and products uptake.
• Failure to keep pace with changing member needs can lead to member attrition
Insecurity • Partnerships with reputable security firms to offer services to members
• Reduces demand for investment hence borrowing
Religious groups • Opportunity to develop religious based products e.g. Islamic products
• Complex product management requirements which may not be compatible with regulatory requiremen
SITUATIONAL ANALYSIS
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STRATEGIC PLAN 2015 - 2017
ISSUE OPPORTUNITIES THREATSTECHNOLOGICALTechnology • New products and services e.g.
alternative banking solutions hence alternative income streams, Social Media Marketing
• Improved member communication
• Enhanced service delivery• Automation hence reduced
operation
• Cyber crime• Keeping up with rapid
changes in technology• High initial acquisition cost
ENVIRONMENTAL Environment • Secure environment within the
complex• Opportunity to improve
environment by going paperless.• Relying on platform that’s
regulated by Host• Availability of a large pool
members to use for penetration• Customer base is beyond the
catchment in Kenya-allowed to get members from all over the world/ Diversity to recruit members in other towns and countries
• Goodwill created by the brand name enables easier member recruitment
• Limited accessibility to the SACCO by the members outside the complex.
• Not able to expand due to limitation in office space
• Overreliance on host platform could pose a threat to innovation and data security
LEGAL AND REGULATORYSASRA and Government Ministries.
• SASRA regulations are improving governance and controls.
• Increased confidence and stability to the sector
• Some SASRA laws threaten the business. When we struggle to comply we may have capital flight through withdrawals.
• Compliance costs in terms of taxes.
• Limitations in product development.
• Over regulation from SASRA/ Ministry limiting the speed of decision making and implementation.
2.10 Stakeholder AnalysisUN SACCO limited works with various stakeholders to achieve its business objectives. Table7 below identifies some of the key stakeholders highlighting what they provide and what the SACCO can provide for them.
SITUATIONAL ANALYSIS
26
Tabl
e 7:
UN
SA
CCO
Sta
keho
lder
Ana
lysi
s
Nam
e of
st
akeh
olde
rRo
le o
f sta
keho
lder
/m
anda
te o
r fun
ctio
nEx
pect
atio
n of
sta
keho
lder
sO
blig
atio
n o
f the
SA
CCO
to
the
sta
keho
lder
Ex
pect
atio
n of
the
SACC
O fr
om th
e st
akeh
olde
rsM
embe
rsSa
ving
s and
bor
row
ing
as
the
key
man
date
of t
he
SACC
O
• Sa
fegu
ardi
ng o
f SAC
CO b
usin
ess
• Effi
cien
t and
effe
ctiv
e cu
stom
er
serv
ice
• Eff
ectiv
e Co
mm
unic
atio
n•
Cont
inuo
us in
nova
tion
for t
he
busin
ess t
o re
tain
a c
ompe
titiv
e ad
vant
age
• Be
tter
inve
stm
ent o
f mem
bers
de
posit
s to
ens
ure
max
imum
re
turn
on
inve
stm
ent
• Co
mpl
ianc
e w
ith re
gula
tory
re
quire
men
ts to
safe
guar
d bu
sines
s
• G
ood
lend
ing
polic
ies a
s pe
r the
law
• W
orld
cla
ss c
usto
mer
se
rvic
e•
Clea
r and
tim
ely
com
mun
icat
ion
• Co
ntin
uous
inno
vatio
n fo
r th
e bu
sines
s to
reta
in a
co
mpe
titiv
e ad
vant
age
• Be
tter
inve
stm
ent o
f m
embe
rs d
epos
its t
o en
sure
max
imum
retu
rn o
n in
vest
men
t•
Com
plia
nce
with
re
gula
tory
requ
irem
ents
to
safe
guar
d bu
sines
s
• At
tend
ing
mee
tings
and
taki
ng p
art
in d
ecisi
on m
akin
g•
Repa
ying
loan
s adv
ance
d to
them
or
guar
ante
ed b
y th
em p
rom
ptly
• Co
mpl
ying
with
by-
law
s, ru
les,
acts
an
d ge
nera
l mee
ting
reso
lutio
ns•
Show
ing
good
coo
pera
tive
spiri
t•
Brin
g ou
t pro
blem
s affe
ctin
g th
e So
ciet
y an
d pa
rtic
ipat
e in
look
ing
for
solu
tions
Boar
d of
D
irect
ors
Stra
tegi
c pl
anni
ng a
nd
Polic
y fo
rmul
atio
n fo
r the
SA
CCO
• St
rate
gy im
plem
enta
tion
by m
anag
emen
t to
ensu
re
mem
bers
enj
oy re
turn
for t
heir
inve
stm
ents
• Im
plem
enta
tion
of p
olic
ies
• En
surin
g su
cces
sful
im
plem
enta
tion
of
the
stra
tegi
c pl
an a
nd p
olic
ies
to e
nsur
e m
embe
rs g
et
valu
e fo
r the
ir in
vest
men
ts•
Safe
guar
ding
of t
he
mem
bers
inte
rest
s•
Effici
ent c
usto
mer
serv
ice
• Pr
ovid
ing
lead
ersh
ip to
the
Soci
ety
• En
surin
g bo
ard
disc
ussio
ns a
nd
reso
lutio
ns a
re in
line
with
cor
pora
te
stra
tegy
• O
bser
ving
in a
ll th
eir t
rans
actio
ns th
e Ac
ts, R
ules
and
By-
law
s and
pru
dent
bu
sines
s pra
ctic
es
Regu
lato
ry
Auth
oriti
es
e.g.
SAS
RA
• En
sure
com
plia
nce
of
the
busin
ess w
ith th
e re
gula
tions
in p
lace
• Co
ntin
uous
mon
itorin
g an
d re
view
of t
he
regu
latio
ns
• Co
mpl
ianc
e w
ith th
e re
gula
tory
re
quire
men
ts•
Feed
back
from
the
SACC
Os o
n th
e im
pact
of t
he re
gula
tions
to
thei
r bus
ines
ses
• En
surin
g co
mpl
ianc
e w
ith th
e re
gula
tory
re
quire
men
ts to
safe
guar
d th
e bu
sines
s
• G
uidi
ng th
e So
ciet
y in
the
impl
emen
tatio
n of
regu
latio
ns
• Be
ing
resp
onsiv
e to
feed
back
giv
en
by th
e So
ciet
y to
enh
ance
bus
ines
s gr
owth
• Ti
mel
y ap
prov
als f
or a
ny m
atte
rs
requ
iring
regu
lato
ry a
ppro
val f
or
exec
utio
n
United Nations SACCO Society Limited • Your Financial Anchor
STRATEGIC PLAN 2015 - 2017
United Nations SACCO Society Limited • Your Financial Anchor 27
Nam
e of
st
akeh
olde
rRo
le o
f sta
keho
lder
/m
anda
te o
r fun
ctio
nEx
pect
atio
n of
sta
keho
lder
sO
blig
atio
n o
f the
SA
CCO
to
the
sta
keho
lder
Ex
pect
atio
n of
the
SACC
O fr
om th
e st
akeh
olde
rs
Vend
ors
• Su
pply
of g
oods
and
se
rvic
es to
ena
ble
runn
ing
of b
usin
ess
• Su
ppor
t and
m
aint
enan
ce
• SA
CCO
to h
ave
clea
r sp
ecifi
catio
ns o
f the
goo
ds a
nd
serv
ices
they
nee
d fro
m v
endo
rs•
Tim
ely
paym
ent f
or g
oods
and
se
rvic
es d
eliv
ered
to S
ACCO
sa
tisfa
ctio
n•
Goo
d cu
stom
er re
latio
nshi
p-ho
nest
y
• D
eliv
ery
of g
oods
an
d se
rvic
es a
s per
sp
ecifi
catio
ns a
nd/o
r SLA
s•
Tim
ely
vend
or su
ppor
t w
here
app
licab
le•
Com
pete
ncy
on th
e si
de
of th
e ve
ndor
• H
ones
ty o
n th
e sid
e of
the
vend
or
• Su
pply
of q
ualit
y go
ods a
nd se
rvic
es
• Ad
here
nce
to su
pply
leve
l ag
reem
ents
Busin
ess
Part
ners
Valu
e ad
ditio
n se
rvic
es e
.g.
Mot
or V
ehic
le in
sura
nce,
M
-Pes
a Se
rvic
es, M
ortg
age
prov
ision
, ATM
serv
ices
, Le
gal s
ervi
ces,
Valu
atio
n se
rvic
es
• Pr
ovisi
on o
f nec
essa
ry
infra
stru
ctur
e an
d re
sour
ces f
or
serv
ice
prov
ision
• Co
mpl
ianc
e an
d ex
ecut
ion
of a
gree
men
ts•
Tim
ely
paym
ent f
or th
e se
rvic
es re
nder
ed
• Ti
mel
y ex
ecut
ion
of a
gree
men
ts
Insu
ranc
e•
Com
pens
atio
n fo
r los
s in
curre
d by
the
SACC
O
as p
er th
e co
ntra
ct
signe
d be
twee
n th
e tw
o pa
rtie
s
• Cl
ear u
nder
stan
ding
of t
he
cont
ract
/pol
icy
signe
d w
ith th
e in
sura
nce
• Co
mpl
ianc
e w
ith th
e co
ntra
ct/
polic
y re
quire
men
ts•
Hon
esty
from
the
SACC
O
• Sp
eedy
sett
lem
ent o
f an
y lo
ss a
s per
the
polic
y•
Hon
esty
on
the
part
of t
he
insu
ranc
e•
Advi
sory
serv
ices
to
safe
guar
d bu
sines
s
• Ad
herin
g to
the
term
s and
con
ditio
ns
of th
e in
sura
nce
polic
ies
UN
SAC
CO
Staff
• Ex
ecut
ion
of th
e SA
CCO
ope
ratio
ns a
nd
activ
ities
• G
ood
wor
king
env
ironm
ent
• Pr
oper
rem
uner
atio
n an
d te
rms a
nd c
ondi
tions
of
serv
ice
• D
ilige
nce,
Inte
grity
and
har
d w
ork
Supe
rviso
ry
Com
mitt
ee•
Ove
rsig
ht o
n th
e Bo
ard
of D
irect
or•
Prud
ent m
anag
emen
t of S
ACCO
Aff
airs
• Pr
ovid
e ad
equa
te
info
rmat
ion
• G
uida
nce
and
advi
se
Nat
iona
lG
over
nmen
t•
Prov
idin
g a
cond
uciv
e en
viro
nmen
t for
bu
sines
ses t
o th
rive
• Ad
here
nce
to th
e po
licie
s, la
ws
and
regu
latio
ns•
Com
plia
nce
with
law
s and
re
gula
tions
• Pr
ovid
e co
nduc
ive
polic
y en
viro
nmen
t
Coun
ty
Gov
ernm
ent
• Re
gula
tor o
f Co
oper
ativ
es a
t the
co
unty
leve
l
• Ad
here
nce
to th
e po
licie
s, la
ws
and
regu
latio
ns•
Com
plia
nce
with
law
s an
d re
gula
tions
• Pr
ovid
e co
nduc
ive
polic
y en
viro
nmen
t
28
STRATEGIC PLAN 2015 - 2017
2.11 Competitor AnalysisIn its quest to provide services to its members and remain profitable as a business venture,UNSACCO is faced with a lot of competition from other financial institutions. The table below presents the institutions that UN SACCO Competes with highlighting generic strengths and weaknesses of each of the institutions.
Table 8: Competitive Analysis of players in the financial sector
Category of Competition
Strengths Weaknesses
Banks • Presence of a clearing house• High liquidity• Higher individual loan amounts• No shares/savings for the loans• Prompt issue of loans? • High marketing strategy• Technology• High staff motivation • Diversified product portfolio• Good governance structures thus
more goodwill from customers• Wide branch network hence easy
accessibility of services
• High and volatile interest rates
• Hidden charges • High security requirements,
SACCOs • Stable and predictable interest rates• Location and accessibility of the
banking premises • Better and spacious banking halls• Advanced and stable investment co-
operatives• Delegates governance system for
faster decision making• More ATM channels e.g.PesaPoint
• Low liquidity – have limits in lending
• Loan queuing• Low investment in
technology
Micro finance Institutions
• Diversified products• Prompt issuance of loans• Marketing and follow-up• Tight loan repayment schedule
closely monitored• Liquidity is high
• High interest rate• Loan decision making is
centralized in Nairobi for most
• Issuance of cheques• High default rate
2.12 Risk AnalysisUN SACCO is exposed to risks in terms of threats to service provision and potential of lost opportunities. The risks which are likely to affect business have been identified, as summarized in Table 9 below, and their attendant mitigation measures considered in the formulation of this Strategic Plan. Risks have been categorized depending on their potential impact as high, medium and low. The summary identifies risks that were classified as high and medium and the mitigation measures therein.
SITUATIONAL ANALYSIS
United Nations SACCO Society Limited • Your Financial Anchor
United Nations SACCO Society Limited • Your Financial Anchor 29
STRATEGIC PLAN 2015 - 2017
Table 9: Risk Analysis
Type of risk Description of risk from SACCO’s perspective
Rate the level of risk (High,
medium, low)
Mitigation of risk
Credit risk Default in loan repayments High Adequate credit policies and procedures
Operational risk Lack of appropriate policies and procedures
High Ensuring adequate policies and control procedure in all business processes
Technological risk
Failure to keep up with rapid changes in technology leading to unstable core banking system
High Investing in modern technological innovations e.g. mobile banking
Market Risk Risks due to fluctuations in the money and investment market
High Make sound investment decisions that are backed by adequate data
Legal and Regulatory Risk
Risks of Non-Compliance could lead to penalties
High Ensuring compliance with all the laws and regulations
Liquidity Risk Risks due to the depreciation of the KES, inflation and interest rates
High Ensuring most of the cash is used in lending and investments
Reputation Risk Loss of reputation in the SACCO sector
High Ensure that there is a proper crisis communication system in place
Financial Risk Debt; penalties High Ensure all financial obligations are fulfilled in good time
SITUATIONAL ANALYSIS
30
STRATEGIC PLAN 2015 - 2017
3.0 STRATEGIC FRAMEWORK
3.1 IntroductionThis chapter presents the strategic direction that UN SACCO limited seeks to pursue in the next four years and beyond. The strategic direction is based on the analysis of the current performance, the operating environment including the economic outlook, stakeholder analysis, customer profiles, competitor’s analysis and a SWOT analysis. In this chapter, the main issues are identified and corresponding strategic goals and objectives are developed based on the Vision and Mission developed.
3.2 Vision“The financial solutions provider of choice”
3.3 MissionTo uplift the socio-economic status of our members by offering them high quality, affordable and diversified financial services.
3.4 Core ValuesIn all our services to members and customers we shall be bound by the following values: -1. Integrity by: upholding the highest level of integrity in our dealings including acting in a
transparent and professional manner;2. Accountability by: accountable to our members and the general public;3. Customer Focus by: ensuring that the customer is at the centre of all our work; and4. Team Work working as a team to deliver results and value to our members
3.5 Summary of Strategic Themes1. Membership diversification2. Corporate Governance3. Business Growth4. ComplianceThese are discussed below:-
1. Membership diversificationDespite being in existence for over three decades, the SACCO has not attracted majority of the employees within the UN agencies. The current membership only represents a paltry 43% of the total potential within the UN agencies. Additionally, the SACCO is yet to recruit other category of members including spouses and children of UN staff, staff of the diplomatic missions and staff of international organizations affiliated to the UN and operating in Kenya. The slow growth in membership affects the ability of the SACCO to build more capital as well as reduces the loan uptake since the current membership is saturated with different products. A growth in membership will definitely see an increase in revenues as a result of uptake of the different products.
STRATEGIC FRAMEWORK
United Nations SACCO Society Limited • Your Financial Anchor
United Nations SACCO Society Limited • Your Financial Anchor 31
STRATEGIC PLAN 2015 - 2017
2. Corporate GovernanceThe success of any institution largely depends on the governance structure it adopts and the subsequent decisions therein. The good governance enables the SACCO to prevent risks such as governance challenges that may restrict membership participation; increase the risks of fraud; poor investment decisions; wrong business decisions; poor quality of staff; reduce productivity and increase instances of maladministration. In the long run the SACCO may lose money through fraud; fail to comply with statutory and legal requirements and may record reduced growth. There is therefore need to improve governance through amendments to the by-laws to provide for a leaner and efficient governance structure; set criteria for board members appointments; adopt and ADM system as opposed to an AGM system; develop a new organizational structure for the secretariat; acquire new office premises; develop appropriate policies and procedures and provide for delegation of responsibilities and authority.
3. Business Growth Business growth for the SACCO prevents it from recording reduced business growth rate in all its financial indicators including loan book, deposits, revenues, costs and core capital. There is an urgent need to ensure growth in these key indicators. This can only be achieved through increasing customer service, diversifying the range of products available, improving internal systems and processes and developing staff capacity.
4. ComplianceCompliance has been a big challenge for UN SACCO since the coming into effect of the SACCO Regulations. While the SACCO has managed to achieve compliance in some indicators such as core capital requirements and core capital to deposit ratios. According to SASRA, the non-compliance with capital norms is mainly due to a non-sustainable business strategy of paying interest rebates way above the industry average. There is therefore need for the SACCO to review its business strategy to ensure an approach that addresses the needs on the savers by paying realistic but sustainable returns, while retaining a reasonable amount of earnings for the SACCO’s long term competitiveness and prudential compliance. Other areas that require compliance include the development of the requisite policies as well as governance.
3.6 Summary of Strategic ObjectivesFrom each strategic theme, strategic objectives were identified that would drive the SACCO into productivity and increased growth. These are summarized below:-
Table 10: Summary of Themes and Objectives
STRATEGIC THEME OBJECTIVES
Membership 1. Increase membership to 8,000 members2. Enhance retention of members
Business Growth and operational excellence
1. Loan book growth2. Grow deposit base
STRATEGIC FRAMEWORK
32
STRATEGIC PLAN 2015 - 2017
3. Revenue growth4. Cost optimization5. Growth of core capital6. Improve customer satisfaction 7. Customer retention8. Product improvement9. Business process automation10 Review Policy & procedure manuals11. Create office space12. BCP (Business continuity)13. Capacity building of staff, board and members
Corporate Governance and Compliance
1. Ensure compliance with SASRA Requirements2. Enhance information access for customers3. Improve Corporate governance of the SACCO4. Improve operational efficiency5. Improve organizational capacity levels
4.0 IMPLEMENTATION OF THE PLAN
4.1 IntroductionImplementation of the plan is also dependent on key Strategic Plan implementation enablers which include:-a. Have enhanced ICT based Systems in place. This includes developing an interactive website
and email accounts for all staff and Board. Installing tailor made software for operations and management.
b. Management and Financial Information System: An MIS that has a communication module and supports publications for the SACCO. Financial Information Systems that incorporate accurate financial reports arising from implementation and monitoring of SACCO activities. Monitoring and Evaluation Systems for specific projects and for operations which should be developed and reviewed regularly.
c. Human Resource: The SACCO should aim to have a human resource base that is informed, motivated and results driven. For this to take root, an aggressive capacity building strategy and training programmes should be adopted and coordinated in areas such as:i. ICT skillsii. Performance management skillsiii. Project planning, implementation and M&E skillsiv. Training for personal development
d. Funds: The SACCO’s aim should be to attain funding sustainability through resource diversification and mobilization approaches.
e. Accountability: The key to successful implementation of the plan is anchored on three factors;i. Efficient Mobilization of Resources
STRATEGIC FRAMEWORK
United Nations SACCO Society Limited • Your Financial Anchor
United Nations SACCO Society Limited • Your Financial Anchor 33
STRATEGIC PLAN 2015 - 2017
ii. Timely Execution of Programmesiii. Effective Monitoring and Evaluation of the entire process
4.2 Implementation ApproachThe SACCO has undertaken to use the Balanced Score Card approach in the implementation of the strategic plan. BSC is an Integrated Strategic Planning and Performance Management System for establishing and communicating an organization’s vision, mission and strategy to stakeholders and employees and for aligning day-to-day work to the strategy. It serves as both a management and a communication tool. It also uses performance measures to monitor progress, provide guidance in budgeting, and better inform strategic decision making. A balanced scorecard should reinforce the objectives of the organization by measuring the things that are important to achieving strategy – not just the ones that are easy to measure. BSC enable companies to link corporate strategy with key performance indicators (KPIs) at the divisional, departmental, and employee level, and communicate them across the enterprise”.
In the BSC, the organization strategies and goals are viewed from four perspectives which are the Customer perspective; the Financial Perspective; the Systems and Processes perspective and the Learning and Growth perspective. The diagram below summarizes the perspectives under the BSC:-
From the strategic themes identified, objectives were then categorized into the various perspectives. The specific measures and targets were then identified as well as the corresponding initiatives that would be undertaken in achieving the objectives. Areas of responsibility for each initiative were identified and specific costs to each initiative were also attached. This is summarized in the implementation matrix in 4.3 below.
STRATEGIC FRAMEWORK
34
4.3
Im
plem
enta
tion
Mat
rix
Tabl
e 11
: Mem
bers
hip
Gro
wth
Mat
rix
GO
AL:
Mem
bers
hip
Gro
wth
by
70%
of t
he c
urre
nt m
embe
rshi
p (8
,000
)BU
DG
ET
Pers
pect
ive
Obj
ecti
veM
easu
reTa
rget
Init
iati
ves
By W
hoBy
Whe
nY1
Y2Y3
CUST
OM
ERIn
crea
se
mem
bers
hip
Num
ber
1,50
0 fro
m U
N
agen
cies
; 500
fro
m D
iasp
ora;
1,
000
from
sp
ouse
s and
ch
ildre
n of
staff
an
d 50
0 fro
m
Dip
lom
atic
M
issio
ns a
nd
Staff
Agen
cy se
gmen
tatio
n an
d m
appi
ng.
HO
M/
FOSA
1ST
QUA
RTER
20
15
300,
000.
0035
0,00
0.00
400,
000.
00Re
ach
out t
o po
tent
ial m
embe
rs
thro
ugh
HR
foca
l po
ints
.
HO
M/
FOSA
CON
TIN
UO
US
Enha
nced
Per
sona
l Se
lling
:Re
crui
t 4 C
omm
issio
n D
irect
Sal
es S
taff.
HR
CON
TIN
UO
US
1,10
0,00
0.00
2,64
0,00
0.00
2,88
0,00
0
Empo
wer
and
re
cogn
ize
UN
SAC
CO
cham
pion
s.
HO
MCO
NTI
NU
OU
S3,
500,
000.
004,
000,
000.
004,
500,
000.
00
Use
Mar
ket I
mpa
ct
Team
s - M
ITs f
or
Agen
cy v
isits
(with
in
Nai
robi
).
HO
MCO
NTI
NO
US
800,
000.
001,
000,
000.
001,
200,
000.
00
Agen
cy V
isits
(Out
side
Nai
robi
)H
OM
QUA
RTER
LY1,
000,
000.
001,
500,
000.
002,
000,
000.
00
Agen
cy V
isits
(D
iasp
ora)
.3,
000,
000.
003,
500,
000.
004,
000,
000.
00
Recr
uitm
ent D
rives
HO
MQ
UART
ERLY
2,00
0,00
0.2,
200,
000.
002,
500,
000.
00In
cent
ives
(Nov
elty
ite
ms o
r tok
en o
f ap
prec
iatio
n) to
new
m
embe
rs a
nd th
ose
who
intr
oduc
e th
em
durin
g pr
omot
ion
time.
CEO
/H
OM
CON
TIN
UO
US
United Nations SACCO Society Limited • Your Financial Anchor
United Nations SACCO Society Limited • Your Financial Anchor 35
GO
AL:
Mem
bers
hip
Gro
wth
by
70%
of t
he c
urre
nt m
embe
rshi
p (8
,000
)BU
DG
ET
Pers
pect
ive
Obj
ecti
veM
easu
reTa
rget
Init
iati
ves
By W
hoBy
Whe
nY1
Y2Y3
Recr
uitm
ent t
hrou
gh
refe
rral
s - R
ewar
d Lo
yalty
/ UN
SAC
CO
Advo
cate
s.
HO
M/
FOSA
CON
TIN
UO
US
500,
000.
0070
0,00
0.00
1,00
0,00
0.00
Exhi
bitio
n Ta
bles
/ St
ands
/ Ba
nner
s/Po
ster
s at
UN
org
aniz
ed
conf
eren
ces.
HO
M/
FOSA
CON
TIN
UO
US
200,
000.
0025
0,00
0.00
300,
000.
00
Cam
paig
ns.
Abov
e-th
e-lin
e (A
TL) p
rom
otio
n –
New
slett
ers
HO
M/
FOSA
CON
TIN
UO
US
1,00
0,00
0.00
1,00
0,00
0.00
1,00
0,00
0.00
Belo
w-t
he-li
ne
(BTL
) pro
mot
ion
– Br
ochu
res,
Bann
ers,
Flie
rs, P
oste
rs e
tc.
HO
MCO
NTI
NU
OU
S50
0,00
0.00
500,
000.
0050
0,00
0.00
Onl
ine
Mar
ketin
g –
Soci
al M
edia
, Web
site,
IS
EEK,
Aut
omat
ed
Not
ifica
tions
etc
HO
MCO
NTI
NU
OU
S20
0,00
0.20
0,00
0.20
0,00
0.
Tele
mar
ketin
g an
d M
-mar
ketin
g - C
all p
oten
tial
mem
bers
or s
end
prod
uct/
serv
ice
notifi
catio
n SM
S to
cu
stom
ers.
HO
M/
ICT
CON
TIN
UO
US
100,
000
100,
000
100,
000
36
GO
AL:
Mem
bers
hip
Gro
wth
by
70%
of t
he c
urre
nt m
embe
rshi
p (8
,000
)BU
DG
ET
Pers
pect
ive
Obj
ecti
veM
easu
reTa
rget
Init
iati
ves
By W
hoBy
Whe
nY1
Y2Y3
Offl
ine
mar
ketin
g –
Add
web
site
addr
ess
to a
ll lit
erat
ure
& pu
blic
atio
ns,
prom
otio
nal i
tem
s, N
ewsp
aper
adv
erts
, vo
icem
ail e
tc.
HO
M/ I
CT
CON
TIN
UO
US
Endo
rsem
ent a
nd
Awar
ds –
•
Agen
cy H
eads
• St
aff A
ssoc
iatio
ns•
Ush
irika
Day
• Fi
nanc
ial
Repo
rtin
g (F
iRe)
.•
MSK
etc
.•
Gov
erna
nce
CEO
/H
OD
SCO
NTI
NU
OU
S3,
000,
000
3,50
0,00
04,
000,
000.
Publ
icity
–
Phila
nthr
opy/
CSR
ac
tiviti
es th
at m
arke
t an
d en
hanc
e th
e vi
sibili
ty o
f the
So
ciet
y.
CEO
/H
OM
QUA
RTER
LY4,
000,
000.
4,00
0,00
04,
000,
000
Ope
n W
eek
/ Ed
ucat
ion
Wee
k.CE
O/
HO
MEV
ERY
1ST&
2ND
Q
UART
ER.
200,
000.
250,
000.
300,
000.
Doc
umen
tary
of
UN
SAC
CO S
ucce
ss
Stor
ies.
HO
MCO
NTI
NU
OU
S50
0,00
0–
–
Exhi
bitio
n Ta
bles
/ St
ands
/ ba
nner
s/Po
ster
s at
UN
org
aniz
ed
conf
eren
ces
HO
MCO
NTI
NU
OU
S–
––
United Nations SACCO Society Limited • Your Financial Anchor
United Nations SACCO Society Limited • Your Financial Anchor 37
GO
AL:
Mem
bers
hip
Gro
wth
by
70%
of t
he c
urre
nt m
embe
rshi
p (8
,000
)BU
DG
ET
Pers
pect
ive
Obj
ecti
veM
easu
reTa
rget
Init
iati
ves
By W
hoBy
Whe
nY1
Y2Y3
In-s
hop
bran
ding
of
Serv
ice
area
s –FO
SA
with
the
pref
erre
d br
and
sym
bols
of th
e So
ciet
y.
HO
MCO
NTI
NU
OU
S1,
500,
000
500,
000.
005,
000,
000.
00
Bran
d ha
rmon
y in
all
mat
eria
ls in
clud
ing
web
sites
, offi
ce
stat
ione
ry a
nd a
ll m
arke
ting
mat
eria
ls an
d pr
omot
iona
l ite
m
HO
MCO
NTI
NU
OU
S3,
000,
000
3,50
0,00
04,
000,
000.
Bran
ded
office
st
atio
nery
–
Enve
lope
s, Fl
ash
Disk
s, Pe
ns, N
ote
pads
, Fol
ders
etc
. Br
ande
d no
velty
ite
ms e
.g. f
olde
rs,
pens
, cap
s, cu
ps,
cale
ndar
s, ke
y ho
lder
s, T-
Shirt
s, Ba
gs
etc.
HO
M/
PRO
CCO
NTI
NU
OU
S2,
000,
000.
002,
000,
000.
002,
000,
000.
00
Rete
ntio
n of
m
embe
rsN
umbe
r7,
500
Educ
atio
n/Tr
aini
ng
Info
rmat
ion
book
let /
Man
uals
to b
e gi
ven
to n
ew m
embe
rs
upon
recr
uitm
ent.
HO
MCO
NTI
NU
OU
S 20
0,00
0.00
200,
000.
0020
0,00
0.00
38
GO
AL:
Mem
bers
hip
Gro
wth
by
70%
of t
he c
urre
nt m
embe
rshi
p (8
,000
)BU
DG
ET
Pers
pect
ive
Obj
ecti
veM
easu
reTa
rget
Init
iati
ves
By W
hoBy
Whe
nY1
Y2Y3
Annu
al E
duca
tion
days
to e
nlig
hten
m
embe
rs o
n Fi
nanc
ial
Man
agem
ent,
Entr
epre
neur
ship
etc
.
CEO
/H
OM
1 PE
R YE
AR2,
000,
000.
002,
000,
000.
002,
000,
000.
00
In –
hou
se tr
aini
ng fo
r Ch
ampi
ons,
Staff
and
D
irect
ors o
n Pr
oduc
ts
& Se
rvic
es, S
ellin
g Sk
ills &
Cus
tom
er
Serv
ice.
HO
MCO
NTI
NU
OU
S1,
000,
000.
001,
000,
000.
001,
000,
000.
00
Initi
ate
trai
ning
s for
In
vest
men
t Clu
bs
& Ju
nior
Acc
ount
H
olde
rs.
HO
MO
NE
TRAI
NIN
G
ANN
UALL
Y50
0,00
0.00
500,
000.
0050
0,00
0.00
Redu
ctio
n or
re
mov
al o
f pos
t sal
es
diss
onan
ce th
roug
h Ed
ucat
ion.
HO
DS
IMM
EDIA
TEAl
read
y bu
dget
ed a
bove
Follo
w-u
p pr
ogra
ms
for n
ew m
embe
rs
to re
mov
e an
y po
st re
crui
tmen
t di
sson
ance
. (Ph
one
calls
, SM
S em
ails,
etc
.)
IMM
EDIA
TE
––
–
Esta
blish
ing
a Fi
nanc
ial A
dviso
ry
Cent
re.
CEO
BY JU
NE
2015
Budg
eted
und
er D
irect
Sal
es R
eps
Benc
hmar
king
w
ith o
ther
fina
ncia
l in
stitu
tions
.
CEO
CON
TIN
OU
OS
100,
000.
0015
0,00
0.00
250,
000.
00
Doc
umen
tary
sh
owca
sing
UN
SA
CCO
mem
bers
’ Su
cces
s Sto
ries.
HO
MBY
DEC
. 201
5Al
read
y bu
dget
ed a
bove
United Nations SACCO Society Limited • Your Financial Anchor
United Nations SACCO Society Limited • Your Financial Anchor 39
GO
AL:
Mem
bers
hip
Gro
wth
by
70%
of t
he c
urre
nt m
embe
rshi
p (8
,000
)BU
DG
ET
Pers
pect
ive
Obj
ecti
veM
easu
reTa
rget
Init
iati
ves
By W
hoBy
Whe
nY1
Y2Y3
Clus
ter t
he m
arke
t in
to v
ario
us
cate
gorie
s acc
ordi
ng
to m
embe
r nee
ds.
HO
MBY
JAN
. 201
5–
––
Dev
elop
ing
tailo
r m
ade
prod
ucts
to
suit
the
diffe
rent
cu
stom
er n
eeds
.
HO
MCO
NTI
NU
OU
S–
––
Und
erta
ke su
rvey
s fo
r wal
k-in
, fiel
d an
d w
ebsit
e cu
stom
ers.
HO
C/FO
SA/
HO
M
QUA
RTER
LY
––
–
Exit
Que
stio
nnai
res
for w
ithdr
awin
g m
embe
rs.
HO
MCO
NTI
NU
OU
S–
––
Dev
elop
ing
and
impl
emen
ting
cust
omer
com
plai
nts
and
feed
back
m
echa
nism
s.
HO
M/
HO
DS
BY JU
NE
2015
––
–
SYST
EMS
AN
D
PRO
CESS
ESCa
rryi
ng o
ut
cust
omer
nee
ds
surv
eys r
egul
arly
HO
M–
––
Dev
elop
a C
usto
mer
se
rvic
e ch
arte
r.H
OD
SBY
MAR
CH 2
015
Perio
dic
revi
ews o
f D
epos
it Ba
ndin
gH
OC
ANN
UALL
Y
Perio
dic
revi
ews o
f le
ndin
g co
nditi
ons
HO
CAN
NUA
LLY
Dep
loyi
ng
com
pete
nt st
aff to
se
rvic
e co
unte
r
HO
M/
FOSA
CON
TIN
UO
US
40
GO
AL:
Mem
bers
hip
Gro
wth
by
70%
of t
he c
urre
nt m
embe
rshi
p (8
,000
)BU
DG
ET
Pers
pect
ive
Obj
ecti
veM
easu
reTa
rget
Init
iati
ves
By W
hoBy
Whe
nY1
Y2Y3
Busin
ess P
artn
ersh
ips
and
allia
nces
for v
alue
ad
ditio
n, to
incr
ease
th
e ra
nge
of p
rodu
cts
HO
MCO
NTI
NU
OU
S50
0,00
0.00
500,
000.
0050
0,00
0.00
Esta
blish
a
com
preh
ensiv
e co
ntac
ts d
atab
ase
for
cust
omer
s.
H/IC
TBY
JAN
201
6
Esta
blish
a S
taff
Bulle
tin.
HO
MBY
DEC
201
5
Esta
blish
an
onlin
e Bu
lletin
for M
embe
rsCE
O/
HO
MCO
NTI
NU
OU
S
LEA
RNIN
G
WIT
H
GRO
WTH
Appo
int D
edic
ated
St
aff to
resp
ond
to
mem
bers
’ em
ails
and
Soci
al m
edia
que
ries.
HO
M/
FOSA
BY JA
N 2
015
To b
e bu
dget
ed u
nder
Cus
tom
er S
ervi
ce st
aff
Reco
gniz
e an
d se
nd B
irthd
ay &
Fe
stiv
ity m
essa
ges t
o m
embe
rs
HO
MCO
NTI
NO
UO
S–
––
Issue
Not
ifica
tions
to
dorm
ant m
embe
rs.
HO
M/IC
TCO
NTI
NO
UO
S–
––
Reco
gniti
on o
f To
p Sa
vers
dur
ing
Mem
ber F
orum
s
HO
MCO
NTI
NO
UO
S–
––
Dev
elop
and
im
plem
ent a
co
mm
unic
atio
n st
rate
gy.
CEO
BY M
ARCH
201
5
United Nations SACCO Society Limited • Your Financial Anchor
United Nations SACCO Society Limited • Your Financial Anchor 41
Tabl
e 12
: Bus
ines
s G
row
th M
atri
x
GO
AL:
Bus
ines
s gr
owth
and
inte
rnal
pro
cess
es e
ffici
ency
No
Are
aO
bjec
tive
Mea
sure
Targ
etIn
itia
tive
sBy
Who
mBy
whe
nY1
Y2Y3
1.Fi
nanc
ial
Loan
boo
k gr
owth
Kshs
10.5
B by
20
17N
ew m
embe
r rec
ruitm
ent
driv
eH
OM
2015
Alre
ady
budg
eted
abo
ve
New
pro
duct
dev
elop
men
t e.
g. F
OSA
HO
M/
HO
FOSA
2015
Revi
ew e
xist
ing
prod
uct
offer
ings
HO
C20
15
Revi
ew e
xist
ing
cred
it po
licy
HO
C20
15
Gro
w d
epos
it ba
seKs
hs.
11B
by
2017
Aggr
essiv
e pr
omot
ion
of d
epos
itsH
OM
2015
Alre
ady
budg
eted
abo
ve
Revi
ew in
tere
st ra
tes o
n fix
ed/s
avin
gs a
ccou
nts
HO
FOSA
2015
Prom
otio
n of
Fix
ed d
epos
it/Ju
nior
/Kin
acc
ount
sH
OFO
SA20
15
Reve
nue
grow
thKs
hs.
2.5B
by
2017
New
mem
ber r
ecru
itmen
t dr
ive
HO
M20
15Al
read
y bu
dget
ed a
bove
Part
ners
hips
and
Join
t Ve
ntur
esAl
read
y bu
dget
ed a
bove
Com
miss
ions
-ATM
&
M-P
esa
aggr
essiv
e m
arke
ting
Intr
oduc
tion
of n
ew
inco
me
segm
ents
from
UN
SA
CCO
Pla
za
HO
M20
17
42
GO
AL:
Bus
ines
s gr
owth
and
inte
rnal
pro
cess
es e
ffici
ency
No
Are
aO
bjec
tive
Mea
sure
Targ
etIn
itia
tive
sBy
Who
mBy
whe
nY1
Y2Y3
New
pro
duct
dev
elop
men
tH
OM
2015
Alre
ady
budg
eted
abo
ve u
nder
Bus
ines
s D
evel
opm
ent &
Ben
chm
arki
ng
Revi
ew in
tere
st ra
tes f
rom
lo
ans
BOAR
D
Cost
op
timiz
atio
nRa
tioM
onito
r cos
t Vs b
udge
tH
OF
Mon
thly
Gro
wth
of c
ore
capi
tal
Kshs
Full
com
plia
nce
by 2
016
Incr
ease
min
imum
shar
e ca
pita
l fro
m K
shs 3
0,00
0 to
Ks
hs 5
0,00
0
BOAR
D20
15
Redu
ce h
igh
pay-
out o
n in
tere
st o
n de
posit
sBO
ARD
2015
Reta
in K
shs 3
00 m
illio
n pe
r ye
ar in
201
4, 2
015,
201
6 &
2017
BOAR
D20
15
Carr
y ou
t edu
catio
n to
m
embe
rs
2.Cu
stom
erIm
prov
e cu
stom
er
satis
fact
ion
Inde
x10
0%Cu
stom
er sa
tisfa
ctio
n su
rvey
HO
MAn
nual
2,00
0,00
0.00
2000
000.
00
Cust
omer
re
tent
ion
%10
0U
N S
ACCO
Cha
mpi
ons
HO
M20
17
Bran
ding
Alre
ady
budg
eted
abo
ve
Educ
atio
n fo
rum
sAl
read
y bu
dget
ed a
bove
Trai
ning
mem
bers
Alre
ady
budg
eted
abo
ve
Regu
lar a
nd ti
mel
yco
mm
unic
atio
nAl
read
y bu
dget
ed a
bove
United Nations SACCO Society Limited • Your Financial Anchor
GO
AL:
Bus
ines
s gr
owth
and
inte
rnal
pro
cess
es e
ffici
ency
No
Are
aO
bjec
tive
Mea
sure
Targ
etIn
itia
tive
sBy
Who
mBy
whe
nY1
Y2Y3
Driv
ing
awar
enes
s on
prod
uct a
nd se
rvic
esAl
read
y bu
dget
ed a
bove
Prod
uct
Impr
ovem
ent
Num
ber
3Pr
omot
ions
HO
M/H
OC/
HO
F20
15Al
read
y bu
dget
ed a
bove
Aggr
essiv
e m
arke
ting
driv
esH
OM
2015
Alre
ady
budg
eted
abo
ve
Und
erta
ke p
rodu
ct re
view
/re
-eng
inee
ring
HO
M–
3.In
tern
al
proc
ess
Busin
ess p
roce
ss
auto
mat
ion
Num
ber
10D
MS
impl
emen
tatio
nH
OIC
T20
177,
000,
000
ISO
cer
tifica
tion
CEO
2015
2,50
0,00
0
CRM
impl
emen
tatio
nIC
T20
153,
000,
000
Cred
it Re
fere
ncin
gH
OC
2015
150,
000
Proc
urem
ent a
nd
Fina
nce
proc
ess
auto
mat
ion
HO
ICT
2015
250,
000
250,
000
250,
000
Enha
nce
inte
rnet
an
d m
obile
ban
king
pl
atfo
rms
HO
ICT
2015
Form
ulat
e an
d En
hanc
e po
licie
s and
pro
cedu
reH
OIC
T20
152,
100,
000
Upg
rade
of N
avisi
on
Syst
em10
,000
,000
United Nations SACCO Society Limited • Your Financial Anchor 43
44
GO
AL:
Bus
ines
s gr
owth
and
inte
rnal
pro
cess
es e
ffici
ency
No
Are
aO
bjec
tive
Mea
sure
Targ
etIn
itia
tive
sBy
Who
mBy
whe
nY1
Y2Y3
Impl
emen
t DRP
(Disa
ster
Re
cove
ry P
lan)
1,00
0,00
050
0,00
0
Roll
out i
nter
activ
e co
mm
unic
atio
n pl
atfo
rm to
m
embe
rs
Revi
ew P
olic
y &
proc
edur
e m
anua
ls
Num
ber
20Re
view
pol
icy
& pr
oced
ure
man
uals
BOD
Mar
ch 2
015
Alre
ady
budg
eted
for
Acqu
ire sh
ort
term
add
ition
al
office
spac
New
Pl
aza
Rent
add
ition
al o
ffice
spac
e ad
jace
nt to
cur
rent
offi
ceBO
ARD
2016
15,0
00,0
009,
600,
000
9,60
0,00
0
Dev
elop
long
te
rm o
ffice
spac
eO
ffice
sp
ace
500s
q m
trs
Purs
ue U
N S
ACCO
Pla
za
Proj
ect
BOAR
D20
1745
0, 0
00,0
0030
0, 0
00,0
0030
0, 0
00,0
00
BCP
(Bus
ines
s co
ntin
uity
)%
100%
Impl
emen
t DRP
HO
ICT
2015
4Le
arni
ng
& gr
owth
Capa
city
bu
ildin
g of
st
aff, b
oard
an
d m
embe
rs
educ
atio
n
Num
ber
18Tr
aini
ng-s
taff/
boar
dCE
OCo
ntin
uous
17
,174
,498
21,9
75,2
2927
,249
,224
Inve
stm
ent f
orum
sCE
OCo
ntin
uous
Wor
ksho
ps C
EOCo
ntin
uous
Educ
atio
n da
yCE
OCo
ntin
uous
Benc
hmar
king
CEO
Cont
inuo
us
Expo
sure
thro
ugh
inte
rnat
iona
l tra
inin
gsCE
OCo
ntin
uous
United Nations SACCO Society Limited • Your Financial Anchor
United Nations SACCO Society Limited • Your Financial Anchor 45
Tabl
e 12
: Bus
ines
s G
row
th M
atri
x
GO
AL:
Impr
ove
Corp
orat
e G
over
nanc
eBU
DG
ET
Pers
pect
ive
Obj
ecti
veM
easu
reTa
rget
Act
ion
By w
hen
Y1Y2
Y3
Fina
ncia
lEn
sure
co
mpl
ianc
e w
ith
SASR
A Ra
tios
Ratio
sCo
re C
apita
l/Ass
ets
– 10
%In
crea
se th
e re
tain
ed e
arni
ngs
- 300
M in
201
4, 3
00M
in 2
015
and
450M
in 2
016
BOD
/MG
T
Inst
itutio
nal c
apita
l/As
sets
– 8
%
Core
cap
ital/T
otal
D
epos
it –
8%
Cust
omer
Enha
nce
info
rmat
ion
acce
ss fo
r cu
stom
ers
Num
ber o
f pr
oces
ses
avai
labl
e on
au
tom
ated
pl
atfo
rm
To d
oubl
e th
e nu
mbe
r of
pro
cess
es
auto
mat
ed
Auto
mat
e on
line
bank
ing,
m
obile
ban
king
(cre
ate
app)
, SM
S fo
r mile
ston
es, c
usto
mer
fe
edba
ck a
lert
s
Hea
d IC
T25
0,00
025
0,00
025
0,00
0
50%
by
June
201
5,
100%
Impl
emen
t DM
S, e
nhan
ce
web
site
inte
ract
ivity
& c
onte
ntH
ead
ICT
Form
ulat
e an
d im
plem
ent a
Co
mm
unic
atio
n St
rate
gyH
ead
of
Mar
ketin
gAl
read
y bu
dget
ed a
bove
Impr
ove
Corp
orat
e im
age
of th
e SA
CCO
Stak
ehol
der
Perc
eptio
n75
% P
erce
ptio
n in
dex
Com
mun
icat
ion
to C
usto
mer
sCE
O
Publ
icity
1,00
0,00
0.00
1,20
0,00
0.00
1,40
0,00
0.00
Corp
orat
e So
cial
Re
spon
sibili
tyAl
read
y bu
dget
ed a
bove
46
GO
AL:
Impr
ove
Corp
orat
e G
over
nanc
eBU
DG
ET
Pers
pect
ive
Obj
ecti
veM
easu
reTa
rget
Act
ion
By w
hen
Y1Y2
Y3
Carr
y ou
t a P
erce
ptio
n Su
rvey
ev
ery
two
year
sH
ead
Mar
ketin
gAl
read
y bu
dget
ed a
bove
Inte
rnal
Pr
oces
ses
Impr
ove
oper
atio
nal
effici
ency
Incr
ease
in
prod
uctiv
ity
inde
x
15%
Form
ulat
e re
quisi
te st
atut
ory
& ot
her p
olic
ies a
nd
proc
edur
e m
anua
ls by
Dec
20
14
CEO
250,
000
250,
000
250,
000
Form
ulat
e an
all-
incl
usiv
e en
terp
rise-
wid
e ris
k m
anag
emen
t & in
tern
al
cont
rol f
ram
ewor
k by
Sep
t 20
15t
CEO
Form
ulat
e an
d te
st a
BCP
w
hich
is a
dequ
ate
for t
he
busin
ess e
nvisa
ged
grow
th b
y Ju
ne 2
015
CEO
Impl
emen
t bus
ines
s pa
rtne
rshi
p fo
rmul
atio
n pr
oces
s with
a S
tand
ard
Ope
ratin
g Pr
oced
ure
by Ja
n 20
15
CEO
Lear
ning
&
Gro
wth
Impr
ove
orga
niza
tiona
l ca
paci
ty le
vels
% a
ge90
%Fo
rmul
ate
a st
aff &
BO
D
rem
uner
atio
n po
licy
BOD
Amen
d by
law
s to
prov
ide
for
proc
edur
e of
app
oint
men
t an
d te
nure
of B
oard
Mem
bers
BOD
United Nations SACCO Society Limited • Your Financial Anchor
GO
AL:
Impr
ove
Corp
orat
e G
over
nanc
eBU
DG
ET
Pers
pect
ive
Obj
ecti
veM
easu
reTa
rget
Act
ion
By w
hen
Y1Y2
Y3
Form
ulat
e an
d im
plem
ent
adeq
uate
BO
D m
anua
ls su
ch
as; B
OD
Ann
ual w
ork-
plan
, BO
D R
ules
of p
roce
dure
, BO
D C
hart
er (M
anua
l), T
ORs
fo
r BO
D c
omm
ittee
s, BO
D
mee
tings
cal
enda
r of e
vent
s, BO
D &
AG
M re
solu
tions
tr
acke
r
BOD
Form
ulat
e an
org
aniz
atio
n st
ruct
ure
with
requ
isite
no.
of
dep
artm
ents
, pos
ition
s &
job
desc
riptio
ns, s
ucce
ssio
n pl
anni
ng.
BOD
Und
erta
ke m
embe
r edu
catio
n on
the
impo
rtan
ce o
f ch
angi
ng th
e go
vern
ance
sy
stem
to a
del
egat
es sy
stem
to
driv
e bu
sines
s gro
wth
and
en
hanc
e va
lue
addi
tion
to
mem
bers
BOD
Ensu
re c
ompl
ianc
e to
et
hica
l sta
ndar
ds a
s set
ou
t in;
Gov
erna
nce
rule
s by
the
Ethi
cs C
omm
issio
n,
Confi
dent
ialit
y re
quire
men
ts
BOD
United Nations SACCO Society Limited • Your Financial Anchor 47
48
STRATEGIC PLAN 2015 - 2017
5.0 FINANCIAL REQUIREMENTSTo implement the strategic plan, the SACCO requires approximately 1.123billion over the next three years. This however excludes any recurrent expenditure since a strategic plan is a development document and focuses mainly on development expenditure. The costs are summarized in the table below:-
Table 14: Financial Requirements Summary
STRATEGIC THEME OBJECTIVES BUDGET
Membership Increase membership to 10,000 43,900,000.00
Enhance retention of members 14,600,000.00
Business Growth and operational excellence
Loan book growth 3,300,000.00
Grow deposit base 1,500,000.00
Revenue growth -
Cost optimization -
Growth of core capital -
Improve customer satisfaction 500,000.00
Customer retention -
New product development -
Business process automation 18,000,000.00
Review Policy & procedure manuals 2,500,000.00
Create office space 1,000,000,000.00
BCP (Business continuity) 1,500,000.00
Capacity building of staff, board and members 22,767,855.00
Corporate Governance and Compliance
Ensure compliance with SASRA Ratios -
Enhance information access for customers 2,000,000.00
Improve Corporate image of the SACCO 1,000,000.00
Improve operational efficiency 7,000,000.00
Improve organizational capacity levels 2,350,000.00
TOTAL BUDGET 1,120,917,855.00
United Nations SACCO Society Limited • Your Financial Anchor
United Nations SACCO Society Limited • Your Financial Anchor 49
STRATEGIC PLAN 2015 - 2017
6.0 MONITORING AND EVALUATIONMonitoring, evaluation and reporting will form a critical feature of the implementation of this strategic plan. The plan will be implemented by the respective departments. The effective monitoring of the implementation of programmes, projects and activities within the strategic plan period shall make use of participatory monitoring, evaluation, and learning approaches. These approaches include: provision of a feedback system on progress, awareness of impacts, transparency and accountability. An M&E framework (in Annex 2) will have the main purpose of focusing on those responsible for implementing various projects and programmes on the anticipated outcomes and or results.
The Strategic Plan activities will be monitored and evaluated during the plan period through the annual work plans to gauge the extent of achievement of the intended results. The evaluation will be useful and will be used to inform a mid-term review of the plan. An implementation framework will be developed to assist in the tracking progress of the implementation.
50
STRA
TEG
IC P
LAN
FY13
AFY
14A
FY15
PFY
16P
FY17
P
1IN
COM
E ST
ATEM
ENT
Inte
rest
inco
me
994,
230,
907
1,07
8,29
4,50
21,
293,
953,
403
1,55
2,74
4,08
31,
863,
292,
900
Oth
er in
com
e63
,026
,109
152,
883,
468
198,
965,
307
255,
759,
527
344,
753,
644
To
tal I
ncom
e1,
057,
257,
017
1,23
1,17
7,97
01,
492,
918,
710
1,80
8,50
3,61
12,
208,
046,
544
Inte
rest
on
mem
bers
savi
ngs a
ccou
nts
13,6
34,7
0417
,093
,965
20,5
12,7
5825
,640
,948
32,0
51,1
85
Inte
rest
on
mem
ber d
epos
its80
5,64
0,90
255
6,38
7,94
170
6,94
9,38
288
0,92
4,70
01,
134,
002,
202
Staff
cos
ts57
,488
,217
68,5
79,6
1110
0,96
1,25
011
9,50
6,63
513
9,94
0,00
1
Dire
ctor
s cos
ts13
,584
,198
18,6
22,8
6029
,822
,683
39,3
96,3
4452
,533
,292
Adm
inist
rativ
e co
sts
87,9
97,4
0615
9,82
1,82
214
7,02
9,72
716
8,72
4,64
719
0,19
1,65
9
Dep
reci
atio
n &
amor
tizat
ion
1,66
4,91
82,
451,
500
12,6
69,8
5012
,909
,550
12,8
63,7
41
Tota
l ope
rati
ng e
xpen
ses
980,
010,
346
822,
957,
699
1,01
7,94
5,65
11,
247,
102,
824
1,56
1,58
2,08
0
Surp
lus b
efor
e ta
x77
,246
,671
408,
220,
270
474,
973,
059
561,
400,
786
646,
464,
464
Tax
expe
nse
5,21
0,70
422
,216
,716
32,4
89,9
7742
,236
,970
57,4
42,2
79
Surp
lus
afte
r tax
72,0
35,9
6738
6,00
3,55
444
2,48
3,08
251
9,16
3,81
658
9,02
2,18
5
2LI
ABI
LITI
ES
Curr
ent L
iabi
litie
s &
Pro
visi
ons
FY13
AFY
14A
FY15
PFY
16P
FY17
P
In
tere
st o
n m
embe
rs' d
epos
its80
5,61
0,17
562
6,59
3,52
270
6,94
9,38
288
0,92
4,70
01,
134,
002,
202
Tr
ade
and
othe
r pay
able
s23
,359
,747
31,2
20,3
9433
,060
,676
35,0
09,4
3237
,073
,058
M
embe
rs' s
avin
gs a
ccou
nts
341,
101,
769
485,
609,
655
582,
731,
587
728,
414,
483
910,
518,
104
Ta
x pa
yabl
e0
3,41
3,82
032
,489
,977
42,2
36,9
7057
,442
,279
To
tal C
urre
nt L
iabi
litie
s &
Pro
visi
ons
1,17
0,07
1,69
11,
146,
837,
391
1,35
5,23
1,62
11,
686,
585,
585
2,13
9,03
5,64
3
Non
Cur
rent
Lia
bilit
ies
Sh
are
capi
tal
260,
024,
554
461,
253,
733
553,
852,
301
664,
622,
761
797,
547,
313
AN
NEX
ESA
nnex
1: F
inan
cial
Tre
nds
and
Proj
ectio
ns fo
r 201
5-20
17
United Nations SACCO Society Limited • Your Financial Anchor
United Nations SACCO Society Limited • Your Financial Anchor 51
M
embe
rs d
epos
its5,
890,
534,
740
6,67
2,46
9,41
37,
539,
890,
437
8,52
0,07
6,19
49,
627,
686,
099
To
tal N
on C
urre
nt L
iabi
litie
s6,
150,
559,
294
7,13
3,72
3,14
68,
093,
742,
737
9,18
4,69
8,95
410
,425
,233
,412
Shar
ehol
ders
’ Equ
ity
Re
tain
ed e
arni
ngs
119,
554,
578
376,
351,
850
638,
087,
569
942,
648,
162
1,28
0,94
1,35
7
St
atut
ory
rese
rves
86,0
08,2
1316
3,20
8,92
425
1,70
5,54
035
5,53
8,30
447
3,34
2,74
1
O
ther
rese
rves
00
To
tal S
hare
hold
ers'
Equ
ity
205,
562,
791
539,
560,
774
889,
793,
109
1,29
8,18
6,46
51,
754,
284,
098
Tota
l Lia
bilit
ies
& S
hare
hold
ers'
Equ
ity
7,52
6,19
3,77
68,
820,
121,
311
10,3
38,7
67,4
6812
,169
,471
,005
14,3
18,5
53,1
52
ASS
ETS
Curr
ent A
sset
sFY
13A
FY14
AFY
15P
FY16
PFY
17P
O
pera
ting
leas
e0
00
00
Lo
ans t
o m
embe
rs1,
613,
345,
870
1,75
4,80
6,68
22,
018,
027,
684
2,34
0,91
2,11
42,
750,
571,
734
Re
ceiv
able
s and
pre
paym
ents
16,3
69,9
1739
,091
,803
39,2
60,1
2039
,429
,162
39,5
98,9
32
Ca
sh a
nd c
ash
equi
vale
nts
1,04
0,84
4,11
71,
734,
542,
871
2,17
4,93
8,12
82,
724,
374,
955
3,24
2,95
5,50
2
Am
ount
due
from
rela
ted
part
ies
00
Ta
xatio
n4,
013,
720
0
To
tal C
urre
nt A
sset
s2,
674,
573,
624
3,52
8,44
1,35
64,
232,
225,
933
5,10
4,71
6,23
16,
033,
126,
168
Non
Cur
rent
Ass
ets
O
pera
ting
leas
e 0
00
00
Lo
ans t
o m
embe
rs4,
840,
037,
611
5,26
4,42
0,04
66,
054,
083,
053
7,02
2,73
6,34
28,
251,
715,
202
Bo
nd p
rem
ium
00
00
0
Equi
pmen
t4,
495,
361
11,8
60,8
1523
,383
,769
19,8
40,4
7315
,648
,327
52
Inta
ngib
le a
sset
s76
8,85
35,
836,
355
18,5
55,7
0210
,607
,046
5,33
5,45
1
4,
845,
301,
825
5,28
2,11
7,21
66,
096,
022,
524
7,05
3,18
3,86
18,
272,
698,
980
Inve
stm
ents
6,31
8,32
69,
562,
738
10,5
19,0
1211
,570
,913
12,7
28,0
04
Tota
l Ass
ets
7,52
6,19
3,77
68,
820,
121,
311
10,3
38,7
67,4
6812
,169
,471
,005
14,3
18,5
53,1
52
FY13
AFY
14A
FY15
PFY
16P
FY17
P
3CA
SH F
LOW
(CO
ND
ENSE
D)
Surp
lus b
efor
e ta
x77
,246
,671
40
8,22
0,27
0 47
4,97
3,05
9 56
1,40
0,78
6 64
6,46
4,46
4
Net
cha
nges
in w
orki
ng c
apita
l-2
,558
,381
-1
0,56
2,70
2 30
,748
,121
11
,526
,708
17
,099
,165
Adju
stm
ents
802,
282,
094
536,
507,
318
686,
172,
982
850,
545,
379
1,08
8,26
6,57
2
Net
incr
ease
in lo
ans t
o m
embe
rs-6
13,1
57,8
42
-565
,843
,247
-1
,052
,884
,009
-1
,291
,537
,718
-1
,638
,638
,480
Net
incr
ease
in m
embe
r dep
osits
764,
235,
644
781,
934,
673
867,
421,
024
980,
185,
757
1,10
7,60
9,90
5
Cash
flow
from
ope
rati
ons
1,02
8,04
8,18
61,
150,
256,
313
1,00
6,43
1,17
61,
112,
120,
912
1,22
0,80
1,62
7
Cash
flow
from
inve
stin
g ac
tiviti
es7,
727,
095
-14,
884,
457
-36,
912,
150
-1,4
17,6
00-3
,400
,000
Cash
flow
from
fina
ncin
g ac
tiviti
es-6
64,5
34,6
03
-441
,673
,101
-5
29,1
23,7
70
-561
,266
,486
-6
98,8
21,0
79
Net
cas
h flo
w37
1,24
0,67
769
3,69
8,75
544
0,39
5,25
754
9,43
6,82
651
8,58
0,54
8
Cash
bal
ance
Ope
ning
bal
ance
669,
603,
440
1,04
0,84
4,11
71,
734,
542,
871
2,17
4,93
8,12
82,
724,
374,
954
Net
cas
h in
flow
371,
240,
677
693,
698,
755
440,
395,
257
549,
436,
826
518,
580,
548
Clos
ing
bala
nce
1,04
0,84
4,11
71,
734,
542,
871
2,17
4,93
8,12
82,
724,
374,
954
3,24
2,95
5,50
2
United Nations SACCO Society Limited • Your Financial Anchor
United Nations SACCO Society Limited • Your Financial Anchor 53
FY13
AFY
14A
FY15
PFY
16P
FY17
P
4RA
TIO
AN
ALY
SIS
Capi
tal a
dequ
acy
Core
cap
ital/T
otal
ass
ets
6%11
%14
%16
%18
%
Core
cap
ital/T
otal
dep
osits
7%14
%18
%21
%24
%
Inst
itutio
nal c
apita
l/Tot
al a
sset
s3%
6%9%
11%
12%
Gro
wth
tren
ds (%
)
Tota
l inc
ome
10%
16%
21%
21%
22%
Inte
rest
inco
me
15%
8%20
%20
%20
%
Oth
er in
com
e-3
6%14
3%30
%29
%35
%
Tota
l ass
ets
15%
17%
17%
18%
18%
Loan
por
tfolio
10%
9%15
%16
%18
%
Mem
ber d
epos
its15
%13
%13
%13
%13
%
Savi
ngs a
ccou
nts
37%
42%
20%
25%
25%
Surp
lus a
fter t
ax-1
8%43
6%15
%17
%13
%
As
a %
of t
otal
inco
me
Inte
rest
inco
me
94%
88%
87%
86%
84%
Oth
er in
com
e6%
12%
13%
14%
16%
Staff
cos
ts5%
6%7%
7%6%
Dire
ctor
s cos
ts1%
2%2%
2%2%
Inte
rest
on
depo
sits
76%
45%
47%
49%
51%
Inte
rest
on
mem
ber s
avin
gs
1%1%
1%1%
1%
Adm
inist
rativ
e co
sts
8%13
%10
%9%
9%
Tota
l ope
ratin
g co
sts
93%
67%
68%
69%
71%
54
Ann
ex 2
: Mon
itori
ng a
nd E
valu
atio
n Fr
amew
ork
KEY
PERF
ORM
AN
CE
IND
ICAT
OR
DEF
INIT
ION
How
is it
ca
lcul
ated
?
BASE
LIN
EW
hat i
s th
e cu
rren
t val
ue
TARG
ETW
hat i
s th
e ta
rget
val
ue (3
Ye
ars)
DAT
A S
OU
RCE
How
will
it b
e m
easu
red?
FREQ
UEN
CYH
ow o
ften
will
it
be
mea
sure
d?
RESP
ON
SIBL
EW
ho w
ill
mea
sure
it?
REPO
RTIN
G
Whe
re w
ill it
be
repo
rted
?
Goa
lAc
hiev
e an
ov
eral
l bus
ines
s gr
owth
of 4
0%
%ag
e gr
owth
in
afte
r tax
surp
lus
414,
770,
663
80,6
78,9
28Co
mpu
tatio
n of
ann
ual
stat
emen
ts o
f ac
coun
ts
Annu
ally
CEO
Boar
d Re
port
to
the
AGM
Out
com
esIn
crea
sed
mem
bers
hip
%ag
e in
crea
se in
th
e nu
mbe
r of
activ
e m
embe
rs
4,73
18,
000
Com
puta
tion
of
new
mem
bers
be
ing
recr
uite
d
Mon
thly
H
oMM
onth
ly re
port
s to
the
Boar
d
Enha
nced
m
embe
rshi
p re
tent
ion
Num
ber o
f act
ive
Mem
bers
4,
731
7,50
0N
umbe
r of
mem
bers
that
re
mai
n ac
tive
Qua
rter
lyH
oMQ
uart
erly
repo
rt
to th
e Bo
ard
Loan
boo
k gr
owth
%ag
e in
crea
se in
th
e lo
an b
ook
7,01
9,22
6,72
911
,002
,286
,936
Com
puta
tion
of
Gro
wth
in lo
ans
Mon
thly
HoC
Mon
thly
repo
rts
to th
e Bo
ard
Gro
wth
in
depo
sits
%ag
e in
crea
se in
de
posit
s7,
158,
079,
069
10,5
38,2
04,2
03Co
mpu
tatio
n of
Gro
wth
in
depo
sits
Mon
thly
HoM
Mon
thly
repo
rts
to th
e Bo
ard
Reve
nue
Gro
wth
%ag
e gr
owth
in
reve
nues
1,23
1,17
7,97
02,
208,
046,
544
Com
puta
tion
of G
row
th in
re
venu
es
Mon
thly
HoF
Mon
thly
repo
rts
to th
e Bo
ard
Cost
O
ptim
izat
ion
Tota
l Ope
ratin
g Co
st a
s a %
age
of
the
tota
l inc
ome
67%
65%
Com
puta
tion
of th
e co
sts V
s In
com
e an
alys
is qu
arte
rly
Qua
rter
lyH
oFQ
uart
erly
Rep
ort
to th
e Bo
ard
Core
cap
ital
grow
thG
row
th in
Cor
e
capi
tal r
elat
ive
to
Asse
ts
11%
18%
Com
puta
tion
of
Capi
tal g
row
thM
onth
lyH
oFM
onth
ly R
epor
t to
the
Boar
d
Gro
wth
in C
ore
ca
pita
l rel
ativ
e to
D
epos
its
14%
24%
United Nations SACCO Society Limited • Your Financial Anchor
KEY
PERF
ORM
AN
CE
IND
ICAT
OR
DEF
INIT
ION
How
is it
ca
lcul
ated
?
BASE
LIN
EW
hat i
s th
e cu
rren
t val
ue
TARG
ETW
hat i
s th
e ta
rget
val
ue (3
Ye
ars)
DAT
A S
OU
RCE
How
will
it b
e m
easu
red?
FREQ
UEN
CYH
ow o
ften
will
it
be
mea
sure
d?
RESP
ON
SIBL
EW
ho w
ill
mea
sure
it?
REPO
RTIN
G
Whe
re w
ill it
be
repo
rted
?
Gro
wth
in
Inst
itutio
nal
capi
tal r
elat
ive
to
Asse
ts
6%12
%
Impr
oved
cu
stom
er
satis
fact
ion
Cust
omer
Sa
tisfa
ctio
n In
dex
-75
%Cu
stom
er
Satis
fact
ion
Surv
ey
Qua
rter
ly
HoM
Qua
rter
ly R
epor
t to
the
Boar
d
New
pro
duct
s de
velo
ped
Num
ber o
f N
ew P
rodu
cts
Dev
elop
ed
-3
Num
ber o
f N
ew p
rodu
cts
deve
lope
d an
d la
unch
ed
Qua
rter
ly
HoM
/HoF
OSA
Qua
rter
ly R
epor
t to
the
Boar
d
Revi
ew o
f Ex
istin
g pr
oduc
tsRe
pack
age
and
re-la
unch
ex
istin
g pr
oduc
ts
-4
Num
ber o
f pr
oduc
ts
repa
ckag
ed a
nd
laun
ched
Qua
rter
ly
HoM
/HoF
OSA
Qua
rter
ly R
epor
t to
the
Boar
d
Busin
ess p
roce
ss
auto
mat
ion
Num
ber o
f bu
sines
s pr
oces
ses
auto
mat
ed
-10
Com
puta
tion
of b
usin
ess
proc
esse
s av
aila
ble
on
an a
utom
ated
pl
atfo
rm
Qua
rter
ly
HoI
CT
Qua
rter
ly R
epor
ts
to th
e Bo
ard
Revi
ewed
Pol
icie
s an
d pr
oced
ures
m
anua
ls
Num
ber o
f po
licie
s and
pr
oced
ure
man
uals
deve
lope
d
-20
Com
puta
tion
of p
olic
ies a
nd
proc
edur
e m
anua
ls av
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ly R
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Addi
tiona
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Spac
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d%
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incr
ease
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the
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e fo
r offi
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Mtr
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for U
N
SACC
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ffice
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Qua
rter
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Repo
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Busin
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of
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United Nations SACCO Society Limited • Your Financial Anchor 55
56
KEY
PERF
ORM
AN
CE
IND
ICAT
OR
DEF
INIT
ION
How
is it
ca
lcul
ated
?
BASE
LIN
EW
hat i
s th
e cu
rren
t val
ue
TARG
ETW
hat i
s th
e ta
rget
val
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Ye
ars)
DAT
A S
OU
RCE
How
will
it b
e m
easu
red?
FREQ
UEN
CYH
ow o
ften
will
it
be
mea
sure
d?
RESP
ON
SIBL
EW
ho w
ill
mea
sure
it?
REPO
RTIN
G
Whe
re w
ill it
be
repo
rted
?
Capa
city
bui
ldin
g fo
r Boa
rd a
nd
Staff
Num
ber o
f Ca
paci
ty b
uild
ing
activ
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for
Boar
d an
d St
aff
-18
Com
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tion
of th
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mbe
r of
act
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es
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rtak
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tow
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cap
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de
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Qua
rter
lyCE
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Boa
rd
Repo
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Com
plia
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with
SA
SRA
Ratio
s/
Requ
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e co
mpl
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tios
90%
100%
Com
puta
tion
of
mon
th to
mon
th
com
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Mon
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CEO
Mon
thly
Rep
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to th
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ard
Enha
nced
In
form
atio
n ac
cess
by
mem
bers
The
prop
ortio
n of
mem
bers
ac
cess
ing
info
rmat
ion
on
the
SACC
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50%
100%
Info
rmat
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acce
ss su
rvey
am
ongs
t the
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Qua
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ly
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Qua
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port
to
the
Boar
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Impr
oved
Co
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Imag
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of
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th
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akeh
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perc
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in a
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Annu
ally
CEO
Annu
al R
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t
Impr
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O
pera
tiona
l Effi
cien
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Incr
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in
Prod
uctiv
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inde
x
XX+
15%
Com
pute
the
staff
pro
duct
ivity
in
dex
in y
ear 1
an
d co
mpu
te
annu
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to
mea
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incr
ease
Annu
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CEO
Annu
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Impr
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gani
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paci
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90%
Org
aniz
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paci
ty
Asse
ssm
ent
Annu
ally
CEO
Annu
al R
epor
t
United Nations SACCO Society Limited • Your Financial Anchor