STRATEGIC PLANSTRATEGIC PLAN 2008 –2008 ––– … sacco final strategic plan.pdf · with...

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United Nations SACCO Ltd strategic plan 2008-2012

STRATEGIC PLANSTRATEGIC PLANSTRATEGIC PLANSTRATEGIC PLAN

2008 2008 2008 2008 –––– 2012 2012 2012 2012

JULYJULYJULYJULY 2008 2008 2008 2008

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TABLE OF CONTENTSTABLE OF CONTENTSTABLE OF CONTENTSTABLE OF CONTENTS PAGE PAGE PAGE PAGE

ACKNOWLEDGEMENTACKNOWLEDGEMENTACKNOWLEDGEMENTACKNOWLEDGEMENT................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................ IIIIIIIIIIII

LIST OF ABBREVIATIONLIST OF ABBREVIATIONLIST OF ABBREVIATIONLIST OF ABBREVIATIONSSSS................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................ IVIVIVIV

EXECUTIVE SUMMARYEXECUTIVE SUMMARYEXECUTIVE SUMMARYEXECUTIVE SUMMARY....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................VVVV

CHAPTER ONE: CHAPTER ONE: CHAPTER ONE: CHAPTER ONE: INTRODUCTIONINTRODUCTIONINTRODUCTIONINTRODUCTION....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................1111

1.1 ORGANIZATIONAL BACKGROUND.................................................................................................... 1 1.2 RATIONALE FOR STRATEGIC PLAN ................................................................................................... 1 1.3 EXPECTED OPERATING ENVIRONMENT/PLANNING ASSUMPTIONS ......................................... 2 1.4 METHODOLOGY OF DEVELOPING THE PLAN ................................................................................. 3 1.5 ORGANIZATION OF THE PLAN ........................................................................................................... 3

CHAPTER TWO: CHAPTER TWO: CHAPTER TWO: CHAPTER TWO: INSTINSTINSTINSTITUTIONAL REVIEWITUTIONAL REVIEWITUTIONAL REVIEWITUTIONAL REVIEW ................................................................................................................................................................................................................................................................................................................................................................................................................5555

2.1 MANDATE AND CORE FUNCTIONS .................................................................................................... 5 2.2 VISION...................................................................................................................................................... 5 2.3 MISSION ................................................................................................................................................... 6 2.4 CORE VALUES ......................................................................................................................................... 6 2.5 CURRENT ORGANIZATIONAL STRUCTURE...................................................................................... 8 2.6 CURRENT STAFF ESTABLISHMENT..................................................................................................... 9

CHAPTER THREE: CHAPTER THREE: CHAPTER THREE: CHAPTER THREE: SITUATIONAL ANALYSISSITUATIONAL ANALYSISSITUATIONAL ANALYSISSITUATIONAL ANALYSIS ................................................................................................................................................................................................................................................................................................................................................................................................10101010

3. 1 INTRODUCTION ................................................................................................................................... 10 3.2 EVALUATION OF PAST PERFORMANCE.......................................................................................... 10 3.3 INTERNAL ENVIRONMENT................................................................................................................ 14 3.4 EXTERNAL ENVIRONMENT ............................................................................................................... 16 3.5 STAKEHOLDER ANALYSIS.................................................................................................................. 17

CHAPTER FOUR: CHAPTER FOUR: CHAPTER FOUR: CHAPTER FOUR: STRATEGIC ISSUES ANDSTRATEGIC ISSUES ANDSTRATEGIC ISSUES ANDSTRATEGIC ISSUES AND OBJECTIVES OBJECTIVES OBJECTIVES OBJECTIVES ....................................................................................................................................................................................................................................................................................................................19191919

4.1 STRATEGIC ISSUES ............................................................................................................................... 19 4.2 STRATEGIC OBJECTIVES..................................................................................................................... 21

CHAPTER FIVE:CHAPTER FIVE:CHAPTER FIVE:CHAPTER FIVE: IMPLEMENTATION PLANIMPLEMENTATION PLANIMPLEMENTATION PLANIMPLEMENTATION PLAN............................................................................................................................................................................................................................................................................................................................................................................................................22222222

CHAPTER SIX: CHAPTER SIX: CHAPTER SIX: CHAPTER SIX: INSTITUTIONAL STRUCTINSTITUTIONAL STRUCTINSTITUTIONAL STRUCTINSTITUTIONAL STRUCTUREUREUREURE............................................................................................................................................................................................................................................................................................................................................................................................32323232

6.1 THE GENERAL MEETING .................................................................................................................... 32 6.2 CENTRAL MANAGEMENT COMMITTEE.......................................................................................... 32 6.3 SUPERVISORY COMMITTEE............................................................................................................... 32 6.4 THE OFFICE OF THE GENERAL MANAGER ..................................................................................... 32 6.5 DEPARTMENTS..................................................................................................................................... 33 6.6 ORGANIZATIONAL STRUCTURE....................................................................................................... 36 6.7 PROJECTED STAFF ESTABLISHMENT ............................................................................................... 37

CHAPTER SEVEN: CHAPTER SEVEN: CHAPTER SEVEN: CHAPTER SEVEN: MONITORING AND EVALUMONITORING AND EVALUMONITORING AND EVALUMONITORING AND EVALUATIONATIONATIONATION....................................................................................................................................................................................................................................................................................................................................38383838

7.1 OBJECTIVES OF MONITORING AND EVALUATION....................................................................... 38 7.2 MONITORING AND EVALUATION FRAMEWORK ......................................................................... 38 7.3 KEY PERFORMANCE INDICATORS ................................................................................................... 39 7.4 FINANCIAL PROJECTIONS.................................................................................................................. 40

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TABLESTABLESTABLESTABLES

Table 1: Current staff establishment .......................................................................................... 9

Table 2: Members’ deposits ........................................................................................................ 10

Table 3: Loans outstanding ........................................................................................................ 11

Table 4: Interest on members’ deposits ..................................................................................... 13

Table 5: Analysis of the growth of the SACCO ........................................................................ 13

Table 6: Analysis of the SACCO’s income and expenditure .................................................... 14

Table 7: Projected staff establishment....................................................................................... 37

Table 8 SACCO’s overall current and projected key performance indicators ....................... 39

FIGURESFIGURESFIGURESFIGURES

Figure 1: Current organizational structure............................................................................... 8

Figure 2: Members’ deposits .................................................................................................... 11

Figure 3: Total loans outstanding............................................................................................ 12

Figure 4: Volume of deposits vs loans outstanding ................................................................ 13

Figure 5: New organizational structure .................................................................................. 36

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ACKNOWLEDGACKNOWLEDGACKNOWLEDGACKNOWLEDGEMENTEMENTEMENTEMENT

The successful development and documentation of this strategic plan was made possible

through teamwork of the management committee, supervisory committee and the staff of

UN SACCO.

We take this opportunity to thank the members of the UN SACCO for their valuable

contributions and suggestions during the planning process.

We thank the management committee for laying the policy framework and direction on

which this strategic plan is based and the supervisory for their valuable oversight during the

planning process. Further, we acknowledge and appreciate their dedication in providing the

relevant information through the planning process.

We are also grateful to the members of staff for their effort and commitment during the

preparation of the strategic plan.

We further recognise the invaluable expertise and guidance of VAS Consultants who

sharpened the preparation of this strategic plan.

Mary Mary Mary Mary OyugiOyugiOyugiOyugi

CHAIRCHAIRCHAIRCHAIRPERSONPERSONPERSONPERSON

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LIST OF ABBREVIATIONSLIST OF ABBREVIATIONSLIST OF ABBREVIATIONSLIST OF ABBREVIATIONS

AGM - Annual General Meeting

ATM - Automated Teller Machine

CMC - Central Management Committee

CRO - Customer Relations Officer

FOSA - Front Office Services Activity

GM - General Manager

HFCK - Housing Finance Company of Kenya

HIV/AIDS - Human Immunodeficiency Virus/Acquired Immune Deficiency

Syndrome

HR - Human Resources

ICT - Information Communication Technology

IT - Information Technology

Ksh - Kenya Shillings

M&E - Monitoring and Evaluation

SC - Supervisory Committee

SWOT - Strengths, Weaknesses, Opportunities and Threats

TNA - Training Needs Assessment

UN - United Nations

UNFCU - United Nations Federal Credit Union

UN SACCO - United Nations Savings and Credit Co-operative Society

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EXECUTIVE SUMMARYEXECUTIVE SUMMARYEXECUTIVE SUMMARYEXECUTIVE SUMMARY

UN SACCO has registered substantial growth since its establishment in 1975 when it had a

membership of 131 and deposits of Ksh 290,000 to a membership of 2,876 and deposits of

approximately Ksh 2.1 billion in 2007. This growth in membership, deposits and other

parameters brings with it challenges that the SACCO requires to deal with so as to

consistently provide quality service to the members. In addition, the changes in the SACCO’s

operating environment require clear policies and strategic direction.

Development of a strategic plan thus became necessary so as to enable the UN SACCO deal

with emerging challenges in the business environment for the next five years. Having re-

examined its mandate and core functions, the SACCO has developed its vision and mission

statements, and the core values which will propel it to the future. A situation analysis

identified strengths, weaknesses, opportunities and threats of the SACCO which together

with an evaluation of past performance formed the basis for the identification of the strategic

issues and objectives for the next five years.

The strategic issues identified are:

i. Marketing and development of new products

ii. Operational efficiency

iii. Information communication technology

iv. Financial sustainability

v. Human resources Management

vi. Performance Management

The SACCO plans to tackle these issues by:

• Reorganizing its organizational structure to include five departments namely: Credit,

Front Office Services Activity (FOSA), Finance and Administration, Information and

Communication Technology (ICT), and Internal Audit;

• Streamlining and strengthening marketing of the SACCO and its products/services;

• Increasing the use of information technology in its operations and;

• Enhancing performance management system.

To help ensure successful implementation of the strategic plan a monitoring and evaluation

(M&E) framework will be followed. The executive committee will be responsible for M&E.

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CHAPTER ONECHAPTER ONECHAPTER ONECHAPTER ONE

INTRODUCTIONINTRODUCTIONINTRODUCTIONINTRODUCTION

This chapter covers the UN SACCO background, rationale for the strategic plan,

methodology of developing the plan and organization of the plan.

1.11.11.11.1 ORGANIZATIONAL BACKGROUNDORGANIZATIONAL BACKGROUNDORGANIZATIONAL BACKGROUNDORGANIZATIONAL BACKGROUND

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 2,876 in 2007. In the

same period, members’ deposits have grown from Ksh 290,000 to Ksh 2.068 billion. The

membership of the SACCO is open to all local and international staff of UN agencies in

Kenya.

The SACCO derives its mandate from the Co-operative Societies Act 2004 and its By-laws.

The affairs of the SACCO are directed by the Central Management Committee (CMC) as

provided for in the By-laws and overseen by the Supervisory Committee (SC) with both

reporting to the AGM. The CMC has the following sub committees: the Executive, Credit,

Finance & Investment, Audit & Information Technology (IT) and Human Resource (HR) &

Education. Day to day operations of the SACCO are carried out by the General Manager

(GM) and other employees.

In line with its objectives, the SACCO offers eleven different types of loans, namely: normal

loan, emergency loan, school fees loan, super loan, instant loan facility, bridging finance,

FOSA salary advance, housing, security financing, car loan and commercial loan refinancing.

In addition, the SACCO offers FOSA, MPESA, Money Gram and financial planning services

to its members. As part of continuing enhancement of its operations, the SACCO procured

an accounting and management information system (Emerge™). The SACCO continues to

embrace new technologies, processes, products and services that will ensure efficient and

effective service provision.

1.21.21.21.2 RATIONALE FOR STRATEGRATIONALE FOR STRATEGRATIONALE FOR STRATEGRATIONALE FOR STRATEGIC PLANIC PLANIC PLANIC PLANNINGNINGNINGNING

The process of strategic planning is aimed at identifying and selecting the most appropriate

ways (strategies) of utilising an organization’s resources to achieve specified objectives, while

taking into account the external environment in which the organization operates. Through

developing, communicating and implementing an effective strategic plan, UN SACCO will

benefit in a number of ways.

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First is the benefit derived from increased organizational effectiveness resulting from the

clear direction provided for the UN SACCO through setting objectives in the strategic plan.

Recognizing these objectives, the stakeholders can more effectively utilize the UN SACCO’s

resources and services.

A second benefit of strategic planning is improved stakeholders’ motivation. Communicating

the strategic plan will stimulate positive response from the various stakeholders of the UN

SACCO, as they will feel that they are a part of a team that is focused on specific purposes

and goals.

Thirdly, strategic planning also provides a framework for evaluating alternative strategies.

This prepares an organization for the future, hence a focus that integrates both the short

term and long term plans. Since the planning process includes discussions touching on all

functional areas, the deliberations provide the planning team with a clear understanding of

the UN SACCO operations. The planning process also provides the functional managers with

an opportunity to broaden their viewpoint and grow with the organization. Involvement of

employees and members enhance commitment and positive attitude towards the UN SACCO

operations. Further, members also get an opportunity to interact and contribute in

identifying the direction and manner in which their resources are utilized.

In the recent past, the business environment has been quite dynamic and challenging, and

characterized by amongst other things, stiff competition and reduced growth in membership.

The various aspects of the environment have significant impact on the UN SACCO’s

performance. As a way of addressing these challenges, the UN SACCO’s management has

realized the importance of strategic management, hence the consideration to formulate a

strategic plan as a critical input for mapping its way forward. This strategic plan will enable

the society to clearly conceptualize and understand its vision, mission and objectives as well

as formulate appropriate strategic courses of action to realize these objectives.

1.31.31.31.3 EXPECTED OPERATING ENVIRONMENT/PLANNING ASSUMPTIONSEXPECTED OPERATING ENVIRONMENT/PLANNING ASSUMPTIONSEXPECTED OPERATING ENVIRONMENT/PLANNING ASSUMPTIONSEXPECTED OPERATING ENVIRONMENT/PLANNING ASSUMPTIONS

In developing the strategic plan, some assumptions have been made, which include:

i. There will be political stability that will enable the UN agencies to continue operating in

the country;

ii. The good relationship between the UN SACCO and the UN agencies will continue;

iii. There will be no major changes in the legislation during the planning period; and

iv. There will be stable fiscal and monetary policies.

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1.41.41.41.4 METHODOLOGY OF DEVELOPING THE PLANMETHODOLOGY OF DEVELOPING THE PLANMETHODOLOGY OF DEVELOPING THE PLANMETHODOLOGY OF DEVELOPING THE PLAN

The participatory strategic planning process was used to ensure ownership of the strategic

plan by all stakeholders, thus enhancing effectiveness and efficiency in the implementation

of the plan. This entailed involvement of CMC, SC, members and employees in the planning

process. Specifically the following methodology was used:

1.4.11.4.11.4.11.4.1 Document Document Document Document reviewreviewreviewreview

VAS consultants reviewed relevant literature/documents. These documents included:

• Management reports (annual accounts, chairman’s reports and supervisory reports);

• Organisation structure;

• Operational plans;

• Internal audit plan;

• Impact study report;

• By-laws; and

• Other relevant documents.

1.4.21.4.21.4.21.4.2 PrePrePrePre----workshop interviewsworkshop interviewsworkshop interviewsworkshop interviews

Interviews and discussions with committee members, key members of staff and members

were conducted. In addition, an electronic questionnaire was distributed to members as a

way of soliciting their views on the various aspects of the strategic plan.

Document review, interviews and questionnaires culminated in the development of a first

draft strategic plan.

1.4.31.4.31.4.31.4.3 Strategic Strategic Strategic Strategic planning workshops planning workshops planning workshops planning workshops

The CMC, SC and key members of staff participated in a two-day workshop to deliberate on

the contents of the first draft strategic plan. A second one-day workshop was held to validate

the contents of the strategic plan.

1.51.51.51.5 ORGANIZATION OF THE PLANORGANIZATION OF THE PLANORGANIZATION OF THE PLANORGANIZATION OF THE PLAN

This strategic plan consists of seven chapters:

Chapter one is introduction, which covers the society’s background, the rationale for

strategic planning, the methodology of developing the plan and organization of the plan.

Chapter two provides the institutional review covering the mandate, core-functions, vision,

mission, core values, current organizational structure and the current staff establishment.

Chapter three presents situational analysis covering an introduction, evaluation of the

SACCO’s past performance, the internal environment, external environment and stakeholder

analysis.

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Chapter four covers strategic issues and strategic objectives.

Chapter five presents the implementation matrix, which covers for each of the strategic

objectives, the strategies, proposed actions, expected outputs, output indicators implementing

actors, time line and the expected outcome of the strategy.

Chapter six presents the new institutional structure.

Chapter seven covers the mechanisms for monitoring and evaluation of the implementation

process, the key performance indicators and financial projections.

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CHAPTER TWOCHAPTER TWOCHAPTER TWOCHAPTER TWO

INSTITUTIONAL REVIEWINSTITUTIONAL REVIEWINSTITUTIONAL REVIEWINSTITUTIONAL REVIEW

This chapter covers the mandate, core functions, vision, mission, core values, current

organizational structure and current staff establishment.

2.12.12.12.1 MANDATE AND CORE FUNCTIONSMANDATE AND CORE FUNCTIONSMANDATE AND CORE FUNCTIONSMANDATE AND CORE FUNCTIONS

UN SACCO derives its mandate from the Co-operative Societies Act, 2004 and the SACCO

By-laws. The SACCO was formed to promote the economic and social interests of members,

in accordance with the co-operative principles, which are:

• 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.

The SACCO is mandated to:

i. Encourage thrift among its members by affording them an opportunity for

accumulating their 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 provident 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 co-

operative societies under the applicable law for the benefit of the members.

2.22.22.22.2 MISSIONMISSIONMISSIONMISSION

Our mission is:

To uplift the socioTo uplift the socioTo uplift the socioTo uplift the socio----economic status of our members by offering them high quality, economic status of our members by offering them high quality, economic status of our members by offering them high quality, economic status of our members by offering them high quality,

affordable and affordable and affordable and affordable and diversified financial services.diversified financial services.diversified financial services.diversified financial services.

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2.32.32.32.3 VISIONVISIONVISIONVISION

Our vision is:

To To To To bebebebe the preferred financial services provider to our members. the preferred financial services provider to our members. the preferred financial services provider to our members. the preferred financial services provider to our members.

2.4 2.4 2.4 2.4 CORE VALUESCORE VALUESCORE VALUESCORE VALUES

UN SACCO in its endeavour to realise the vision and mission upholds the following core

values:

2.4.12.4.12.4.12.4.1 Team Team Team Team workworkworkwork

The success of the SACCO in pursuit of its mission will be ensured by close collaboration

among its members, CMC, SC and the staff. This will enhance the quality of services to its

stakeholders. UN SACCO also encourages respect for diversity among its members,

committees and employees.

2.4.22.4.22.4.22.4.2 AccountabilityAccountabilityAccountabilityAccountability

The SACCO is accountable to its members, the government and other stakeholders. It

ensures that the culture of accountability is embodied in its internal stakeholders both

individually and collectively.

2222.4.3.4.3.4.3.4.3 Customer Customer Customer Customer focusfocusfocusfocus

In developing its products/services as well as in the provision of its services, the SACCO

ensures that these are customer-driven so as to satisfy diverse members and their changing

needs.

2.4.42.4.42.4.42.4.4 TransparencyTransparencyTransparencyTransparency

The SACCO endeavours to ensure transparency at all times when dealing with its

stakeholders. The internal stakeholders are also expected to be sincere and transparent in

their dealings with the SACCO.

2.4.52.4.52.4.52.4.5 Professionalism Professionalism Professionalism Professionalism

The SACCO adheres to impeccable and beyond reproach professional and personal standards

in the conduct of its affairs. The society offers its services effectively and efficiently to all

members.

2.4.62.4.62.4.62.4.6 IntegrityIntegrityIntegrityIntegrity

The SACCO upholds a high degree of honesty and integrity in serving its members and other

stakeholders.

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2.4.72.4.72.4.72.4.7 CommitmentCommitmentCommitmentCommitment

The CMC and the staff must be committed to do their best at all times, in the provision of

services to the members and other stakeholders.

The acronym ““““““““TACTPIC” TACTPIC” TACTPIC” TACTPIC” was adopted to aid in remembering the core values where:

TTTT ---- Teamwork

A A A A ---- Accountability

CCCC---- Customer focus

T T T T ---- Transparency

PPPP---- Professionalism

IIII---- Integrity

C C C C –––– Commitment.

Note:Note:Note:Note: The listing of the core values is not in order of importance.

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2.52.52.52.5 CURRENT ORGANIZATIONAL STRUCTURECURRENT ORGANIZATIONAL STRUCTURECURRENT ORGANIZATIONAL STRUCTURECURRENT ORGANIZATIONAL STRUCTURE

The current organizational structure is as depicted below.

Figure 1: Current organizational structure

AGM

Central

Management

Committee

General Manager

Supervisory

Committee

FOSA Officer

Teller

Accountant

System

Administrator Customer

Relations Officer

Loans Officer

Accounts

Assistant

Office Assistant

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2.62.62.62.6 CURRENTCURRENTCURRENTCURRENT STAFF ESTABLISHMENT STAFF ESTABLISHMENT STAFF ESTABLISHMENT STAFF ESTABLISHMENT

The staff establishment as at May 2008 is shown in Table 1.

Table 1: Current staff establishment

PositionPositionPositionPosition In postIn postIn postIn post

General Manager 1

Accountant 1

FOSA Officer 1

Customer Relations Officer 1

Loans Officer 1

System Administrator 1

Accounts Assistant 3

Teller 2

Office Assistant 1

TOTALTOTALTOTALTOTAL 12121212

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CHAPTER THREECHAPTER THREECHAPTER THREECHAPTER THREE

SITUATIONAL ANALYSISSITUATIONAL ANALYSISSITUATIONAL ANALYSISSITUATIONAL ANALYSIS

This chapter covers an introduction to situational analysis, evaluation of past performance,

analysis of internal and external environments which culminated in identification of

strengths, weaknesses, opportunities, threats (SWOT) and stakeholders’ analysis.

3.13.13.13.1 INTRODUCTIONINTRODUCTIONINTRODUCTIONINTRODUCTION

Situational analysis is a critical step in the strategic planning process. It enables an

organization address the question: Where are we now? Situational analysis for UN SACCO

was undertaken through an assessment of the past performance and the operating

environment to answer the key questions of “where has the society come from?” and “where is

it now?” In order to answer these questions, the following analysis was undertaken:

i. A review of the SACCO’s past performance;

ii. An analysis of the internal environment of the society so as to identify the SACCO’s

strengths and weaknesses; and

iii. An analysis of the external environments to identify opportunities and threats.

3.23.23.23.2 EVALUATION OF PAST PERFORMANCEEVALUATION OF PAST PERFORMANCEEVALUATION OF PAST PERFORMANCEEVALUATION OF PAST PERFORMANCE

A review of the SACCO’s past performance was undertaken in order to understand where the

society is coming from and to identify factors that have contributed to favourable or

unfavourable results. This was carried out through an analysis of the SACCO’s performance

trend for selected indicators over the past four years. The results are as follows:

3.2.13.2.13.2.13.2.1 MMMMembers’ depositsembers’ depositsembers’ depositsembers’ deposits

This refers to the total amount of contributions by members to the SACCO at the end of a

particular year. Table 2 and figure 2 show the trend in the last four financial years.

Table 2: Members’ deposits

Financial year Financial year Financial year Financial year 2004200420042004 2005200520052005 2006200620062006 2020202007070707

Volume of deposits

(Ksh millions) 1,158.1 1,431.4 1,759.1 2,068.2

Growth rate 24% 24% 23% 18%

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Figure 2: Members’ deposits

Members’ deposits have been increasing over the last four years. However, the percentage

growth rate has declined over the four years.

3.2.23.2.23.2.23.2.2 LoanLoanLoanLoanssss outstandingoutstandingoutstandingoutstanding

This refers to the total amounts of outstanding loans in a particular financial year. Table 3 and

Figure 3 show the trend in the last four financial years.

Table 3: Loans outstanding

Financial year Financial year Financial year Financial year 2004200420042004 2005200520052005 2006200620062006 2007200720072007

Loans outstanding

(Ksh millions) 1,113.1 1,312.5 1,870.9 2,398.2

Growth rate 8% 18% 43% 28%

1158.1

1431.4

1759.1

2068.2

0

500

1000

1500

2000

2500

2004 2005 2006 2007

Financial years

Amount in millions

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Figure 3: Total loans outstanding

As shown above, total loans outstanding have increased considerably over the years. The

growth rate in loans outstanding to members has been increasing from 8% in 2004 to 43% in

2006 before declining to 28% in 2007. In addition, for the last two years, total loans

outstanding have exceeded members’ deposits as shown in figure 4.

1,113.1

1,312.5

1,870.9

2,398.2

0

500

1000

1500

2000

2500

Amount in Ksh millions

2004 2005 2006 2007

Financial years

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Figure 4: Volume of deposits vs loans outstanding

3.2.33.2.33.2.33.2.3 Analysis of interest on depositsAnalysis of interest on depositsAnalysis of interest on depositsAnalysis of interest on deposits

The interest paid to members for their deposits is summarized in Table 4. The analysis shows

that the rate of interest on members’ deposits has increased in the last two years.

Table 4: Interest on members’ deposits

Financial yearFinancial yearFinancial yearFinancial year 2004200420042004 2005200520052005 2006200620062006 2007200720072007

Interest on members deposits

(Ksh millions) 116.2 141.3 247.1 346.0

Interest as a percentage of

members’ deposits (%) 11 11 15 18

3.2.43.2.43.2.43.2.4 Analysis ofAnalysis ofAnalysis ofAnalysis of growth in membership and net assets growth in membership and net assets growth in membership and net assets growth in membership and net assets

A review of the SACCO’s growth was carried out in terms of the membership and total assets.

The results of this analysis are summarized in Table 5.

Table 5: Analysis of the growth of the SACCO


Members (Number) 2,501 2,886 2,767 2,876

Growth in membership (%) -3 15 -4 4

Net assets (Ksh millions) 1,226.6 1,518.5 1,867.4 2,190.0

Growth in net assets (%) 25 24 23 17

0

500

1000

1500

2000

2500

2004 2005 2006 2007 Financial years

Members' deposits Total Loans outstanding

Amount in Ksh millions

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The growth in number of members has been low over the last four years with the exception of

year 2005 which had a rate of 15%. The net assets have increased over the four years, however

the growth rate has declined over the years.

3.2.43.2.43.2.43.2.4 Analysis of incomeAnalysis of incomeAnalysis of incomeAnalysis of income and expenditure and expenditure and expenditure and expenditure

An analysis of the SACCO’s income indicates that the absolute income has been increasing

over the four years but the growth rate has been oscillating over the period. The net surplus

has been reducing over the period and was 4% of income in 2007. The results of this analysis

are summarized in Table 6.

Table 6: Analysis of the SACCO’s income and expenditure


Income (Ksh millions) 148.8 185.4 305.9 413.2

Growth in income 36% 25% 65% 35%

Staff costs (Ksh millions) 8.6 12.8 17.6 21.5

Staff costs/Income 6% 7% 5% 5%

Operating costs (Ksh millions) 3.4 4.8 11.6 22.7

Operating costs/ Income 2% 3% 4% 6%

Interest on members deposits (Ksh millions) 116.1 141.3 247.1 346.0

Interest on member deposits/Income 78% 76% 77% 84%

Financial costs (excluding interest on members

deposit) (Ksh millions) 0.7 1.2 1.7 3.2

Financial costs(excluding interest on members

deposit)/Income 0.5% 1% 1% 1%

Net surplus after distribution of dividends (Ksh

millions) 19.3 22.6 23.4 15.1

Net surplus/Income 13% 12% 8% 4%

3.33.33.33.3 INTERNAL ENVIRONMENTINTERNAL ENVIRONMENTINTERNAL ENVIRONMENTINTERNAL ENVIRONMENT

Analysis of internal environment entails identifying issues within the organization that

positively or negatively affect its performance. Review of the functions of marketing, finance

and accounting, operations, human resources, information and communication technology

and the general management resulted in the identification of strengths and weaknesses.

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3.3.13.3.13.3.13.3.1 Strengths Strengths Strengths Strengths

Strengths are the resources or capabilities that help an organization accomplish its mandate or

mission. The strengths of UN SACCO are:

1. High capital base;

2. Committed and capable committee members;

3. Existence of a loan protection scheme;

4. Strategic and secure location;

5. Knowledgeable and supportive members;

6. Existence of competent and committed staff;

7. Efficient processing and disbursement of loans;

10. Existence of members with large disposable income;

11. Existence of good office infrastructure;

12. Networking of the SACCO with the UN agencies; and

13. Accountability and transparency within the SACCO.

3.3.23.3.23.3.23.3.2 Weaknesses Weaknesses Weaknesses Weaknesses

Weaknesses are deficiencies in resources and capabilities that hinder an organization’s ability

to accomplish its mandate or mission. The weaknesses of UN SACCO are:

1. Inadequate human resource management policies;

2. Insufficient record management policies;

3. Poor communication between staff, committees and members;

4. Inadequate security policies e.g. weak password settings, existence of dormant accounts,

no systematic review of user rights, review of exceptional reports, access to the back

office by members;

5. Lack of succession planning;

6. Inadequate performance management system in place;

7. Poor implementation of the new information system e.g. inadequate systems

documentation such as a change manual and user manual;

8. Existence of outdated processes in the SACCO;

9. Confidentiality of member information not adequate;

10. Lack of systems that would allow services to be accessed outside the UN complex;

11. Inadequate marketing of SACCO products and services;

12. Lack of active participation by members during AGM and education days;

13. Delays in informing guarantors when members default leading to accumulated interest;

14. Lack of SACCO dedicated notice board;

15. Inadequate business continuity plan;

16. Lengthy deliberations during AGM;

17. Slow implementation of decisions taken during AGM or by management committee;

18. Inadequate customer care and public relations;

______________________________________________________________________________________________


16

19. Lack of products for members with high levels of savings and retirees; and

20. Insufficient research and development.

3.43.43.43.4 EXTERNAL ENVIRONMENTEXTERNAL ENVIRONMENTEXTERNAL ENVIRONMENTEXTERNAL ENVIRONMENT

Analysis of external environment identifies factors outside the organization that may impact

on the organization either positively (opportunities) or negatively (threats).

3.4.13.4.13.4.13.4.1 OpportunitiesOpportunitiesOpportunitiesOpportunities

These are factors or situations that can impact on the organization favourably. The

opportunities available to UN SACCO include:

1. Existence of potential market that is currently not exploited by the SACCO:

• staff members of the UN agencies who are not members of the SACCO

• SACCO members’ spouses and children

• members of the diplomatic missions in the country

• employees of the UN contractors

2. Engaging in strategic partnership with other organizations such as Housing Finance

Company of Kenya (HFCK), commercial banks and United Nations Federal Credit Union

(UNFCU) so as to improve service provision to the members especially in the mortgage

product and ATM services;

3. Demand for new products suited for retirees and those on short-term contracts;

4. Advances in ICT which can help in improving service delivery through telephony;

5. Demand for new products by the members including Western Union, group loans,

foreign exchange services, dividend discounting and savings accounts for non-members;

and

6. Support from the UN Agencies which could help in recruiting of new members and

follow-up on the status of the current members when need arises.

3.4.2 Threats 3.4.2 Threats 3.4.2 Threats 3.4.2 Threats

These are external factors or situations that can affect the organization in a negative way.

Some of the threats to UN SACCO include:

1. Political instability;

2. Relocation of some UN agencies which may cause a reduction in membership;

3. Increased competition from commercial banks, financial institutions, micro-finance,

individuals and other institutions offering similar services;

4. Employer advances/commitments taking priority over SACCO contributions;

______________________________________________________________________________________________


17

5. Lack of agreement with employers on how to charge employees benefits in case of

retirement/end of contract while there is an existing loan;

6. Delay of remittance of members contributions for those located outside Nairobi;

7. Non-renewal of members’ contracts by the UN Agencies which lead to reduction of

members;

8. The impact of Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome

(HIV/AIDS) and related diseases on employees and members;

9. The impact of the anticipated SACCO law and other future legislations; and

10. Increasing rate of inflation and un-regular review of salaries in the UN agencies may lead

to reduction in members’ deposits.

3.53.53.53.5 STAKEHOLDER ANALYSISSTAKEHOLDER ANALYSISSTAKEHOLDER ANALYSISSTAKEHOLDER ANALYSIS

A stakeholder is any person, group or institution that has an interest in the activities of an

organization. UN SACCO has many stakeholders. Some of the key stakeholders include:

3.5.13.5.13.5.13.5.1 MembersMembersMembersMembers

These are the eligible individuals by application and registration as members of the UN

SACCO. The members are expected to patronize the products and services of the society, and

to give input on the management issues, types of products/services in the Annual General

Meetings (AGM), or in any other forum, as may be designated by members, Co-operative

Societies Act and By-laws.

3.5.23.5.23.5.23.5.2 NonNonNonNon----member customersmember customersmember customersmember customers

These are individuals/institutions who are not members by registration but are able to access

and enjoy the services/products offered by the society. The SACCO must provide competitive

services so as to attract and retain these clients as customers of the society.

3.5.33.5.33.5.33.5.3 Bankers Bankers Bankers Bankers

These are commercial banks and other financial institutions with whom the UN SACCO

transacts in one way or another. Good working relationships and effective operational linkages

must be nurtured and maintained.

3.5.43.5.43.5.43.5.4 SuppliersSuppliersSuppliersSuppliers

These are individuals or organizations that supply the UN SACCO with either materials or

services. The SACCO needs to develop and implement non-discriminative procurement

policies that will ensure the services/products provided by suppliers are competitive and meet

the expectations of the SACCO as they will have an impact on the overall performance of the

SACCO.

______________________________________________________________________________________________


18

3.5.53.5.53.5.53.5.5 Government of KenyaGovernment of KenyaGovernment of KenyaGovernment of Kenya

The UN SACCO operates under the supervision of the Ministry of Co-operatives Development

and Marketing. The Ministry is expected to provide policies and legislation to govern the

operations as well as to provide an enabling environment for growth and development of co-

operative societies. The UN SACCO should develop good working relations with the ministry

and other relevant government ministries or departments.

3.5.63.5.63.5.63.5.6 UN UN UN UN agenciesagenciesagenciesagencies

The SACCO draws its membership from the employees of the UN agencies hence a need for

the SACCO to develop strong and good working relations and networks with the agencies.

3.5.73.5.73.5.73.5.7 UN SACCO’s employeesUN SACCO’s employeesUN SACCO’s employeesUN SACCO’s employees

Human resources are critical determinants of an organization’s performance. The employees

constitute a major asset of the UN SACCO and their welfare and motivation are of utmost

importance to enhance the SACCO success.

3.5.83.5.83.5.83.5.8 National coNational coNational coNational co----operative organizationsoperative organizationsoperative organizationsoperative organizations

These are other co-operative organizations under which UN SACCO operates and in one way

or another either interacts or transacts business with.

______________________________________________________________________________________________


19

CHAPTER FOURCHAPTER FOURCHAPTER FOURCHAPTER FOUR

STRATEGIC ISSUES AND OBJECTIVESSTRATEGIC ISSUES AND OBJECTIVESSTRATEGIC ISSUES AND OBJECTIVESSTRATEGIC ISSUES AND OBJECTIVES

This section identifies and highlights the key strategic issues and objectives arising from the

situational analysis.

4.14.14.14.1 STRATEGIC ISSUES STRATEGIC ISSUES STRATEGIC ISSUES STRATEGIC ISSUES

A strategic issue is a fundamental factor relating to or affecting an organization’s mandate,

mission, products, services or clients. The UN SACCO needs to focus on the strategic issues in

order to create and maintain competitive advantage and prosper.

The strategic issues for UN SACCO are:

i. Marketing and development of new products

ii. Operational efficiency

iii. Information communication technology

iv. Financial sustainability

v. Human resources management

vi. Performance management.

These strategic issues form the basis for the formulation of objectives and strategies that will

ensure the UN SACCO achieves its mission and goals. These issues are explained below:

4.1.14.1.14.1.14.1.1 Marketing and development of new productsMarketing and development of new productsMarketing and development of new productsMarketing and development of new products

One of the challenges to the SACCO is to increase and maintain membership that save

regularly, borrow wisely and repay promptly. This calls for aggressive marketing of the

SACCO as well as its products to the members and non-member employees of the UN

agencies, spouses and children of the eligible members as a way of increasing membership and

patronage. The increased membership will require development of new products and services

so as to attract and retain the members. Development of a marketing plan and research &

development policies are also critical in ensuring the success of the SACCO.

4.1.24.1.24.1.24.1.2 Operational efficiencyOperational efficiencyOperational efficiencyOperational efficiency

To improve efficiency and effectiveness in the SACCO, there is need to review the current

processes, policies and procedures to make them relevant and consistent with the business

environmental changes such as changes in technology and members’ needs. The processes and

procedures require to be reviewed so as to pave way for more efficient ICT based processes

______________________________________________________________________________________________


20

especially in the areas of loan applications, processing, communication, accounting, auditing

and record management. In addition, policies and procedures should be reviewed/developed

so as to guide the operations of the SACCO.

4.1.34.1.34.1.34.1.3 Information Information Information Information communication technology communication technology communication technology communication technology

The SACCO has adopted the use of Information Communication Technology (ICT) in its

operations and communication with its members. It recently implemented a new accounting

and management information system, Emerge™. However, there are challenges emerging

from the system which need to be addressed so as to ensure improved services and up-to-date

information to members. The SACCO also needs to explore new ways of utilizing ICT in order

to enhance service delivery, reduce costs and attract more members. Efficient and effective use

of ICT requires coordinated implementation of ICT policy. To this end, the SACCO needs to

develop an ICT policy that will guide the acquisition, use and disposal of ICT hardware and

software.

4.1.44.1.44.1.44.1.4 Financial sustainability Financial sustainability Financial sustainability Financial sustainability

To ensure financial sustainability of the SACCO into the future there is need to build a strong

institutional capital base. This requires proactive initiatives to increase the members of the

SACCO especially at the UN agencies offices. In addition, there is need to introduce new and

innovative products/services as a way of increasing members’ patronage given the current stiff

competition by commercial banks. In particular, the SACCO needs to design specific products

to cater for the separating members as well as those on short-term contracts with the UN

agencies. This calls for a market research to determine the optimal products portfolio that will

ensure good returns to the members as well as considering the potential risks to the SACCO.

The SACCO also requires to develop a dividend policy which will balance the need for

distribution, retention and sustainability.

4.1.54.1.54.1.54.1.5 Human resources managementHuman resources managementHuman resources managementHuman resources management

The success of the UN SACCO is dependent on availability of highly skilled and motivated

staff, who will ensure smooth operations of the SACCO activities. The SACCO needs to attract

and maintain adequate and high quality staff that are capable of supporting the diversified

products at all times. Towards this, the SACCO needs to develop a comprehensive human

resource strategy and policies for performance improvement. There is also the need for a clear

reporting structure within the SACCO, which aligns the business strategy and the structure.

______________________________________________________________________________________________


21

4.14.14.14.1.6.6.6.6 Performance managementPerformance managementPerformance managementPerformance management

Performance management system is important in ensuring that the SACCO attains its goals

and objectives. The SACCO lacks a comprehensive performance management system to

evaluate the performance of the SACCO as a whole, the central management committee, the

supervisory committee, sub-committees and the employees. There is need for a performance

management system which will incorporate a balanced scorecard approach in performance

management. This approach takes into account both financial and non financial aspects of

performance by working from four perspectives namely financial perspective, customer

perspective, business process perspective and, learning and growth perspective.

4.24.24.24.2 STRATEGIC OBJECTIVESSTRATEGIC OBJECTIVESSTRATEGIC OBJECTIVESSTRATEGIC OBJECTIVES

In addressing the strategic issues we require formulation of a set of relevant strategic

objectives. Strategic objectives specify what an organization expects to fulfil within a given

time period. They give an indication of “what” and “how” much is to be accomplished. Once

developed, they help in the design of strategies.

The strategic objectives for the SACCO for the next five years are:

1. To increase membership from the current 2,876 to approximately 4,500 by the year 2012.

2. To increase awareness and patronage of the SACCO products and services from the current

60% to 100% of members.

3. To improve efficiency and effectiveness of the operations of the SACCO by reducing staff

and operating costs to below 10% of the total income.

4. To increase institutional capital to 6% of the total assets.

5. To attract, develop and retain a highly skilled, motivated and disciplined staff.

6. To enhance performance management in the SACCO.

Strategies are the vehicles that enable an organization to achieve its objectives, thereby

accomplishing its mission. Once strategies are documented, specific activities/actions that need

to be undertaken are identified. For each activity, there is need to document time line, persons

responsible for each of the activities, and the expected performance indicators. These will help

in the implementation and monitoring of strategies. The strategies and activities are presented

in chapter 5.

_________________________________________________________________________________________________________________________________


22

CHAPTER FIVECHAPTER FIVECHAPTER FIVECHAPTER FIVE

IMPLEMENTATION PLANIMPLEMENTATION PLANIMPLEMENTATION PLANIMPLEMENTATION PLAN

Chapter five presents the implementation matrix, which covers the strategic objectives, the strategies, proposed activities,

expected output, output indicators, implementing actors, timeline and the expected outcome of the strategy.

Objective 1:Objective 1:Objective 1:Objective 1: To increase membership from the current 2,876 to approximately 4,500 by the year 2012.To increase membership from the current 2,876 to approximately 4,500 by the year 2012.To increase membership from the current 2,876 to approximately 4,500 by the year 2012.To increase membership from the current 2,876 to approximately 4,500 by the year 2012.

StrategyStrategyStrategyStrategy ActivityActivityActivityActivity Expected outpuExpected outpuExpected outpuExpected outputttt Output indicatorsOutput indicatorsOutput indicatorsOutput indicators Implementing Implementing Implementing Implementing

actorsactorsactorsactors

TimelineTimelineTimelineTimeline Expected outcome of Expected outcome of Expected outcome of Expected outcome of

strategy strategy strategy strategy

Conduct member

recruitment drive(s)

Successful recruitment

drives

New members

No. of recruitment

drives

No. of new members

CMC/ GM/

FOSA

manager/CRO

Quarterly Attract new

members

Advertise the UN

SACCO

Increased awareness of

the SACCO

New members

No. of adverts within

reach of potential

members

No. of new members

CMC/ GM /

CRO/Agencies

Immediate &

continuous

Increased no. of new

members

Train staff on public

relations and

customer care

Informed and

motivated work force

Improved customer

service

Increased member

retention

No. of training sessions

held

No. of customer

complaints.

CMC/ HR &

Education

committee/ GM

Immediate &

continuous

Retention of

members

Review & develop

products / services to

cater for the diverse

socio-economic

interests of the

existing and new

members

Diversified products

/services

Increased retention of

members

No. of new products

and services

introduced

Patronage of new

products/services

CMC / Credit

committee/

Finance &

Investment

committee/ GM

/ FOSA

manager/CRO

Immediate &

continuous

Reduced no. of

members leaving the

SACCO

_________________________________________________________________________________________________________________________________


23

StrategyStrategyStrategyStrategy ActivityActivityActivityActivity Expected outpuExpected outpuExpected outpuExpected outputttt Output indicatorsOutput indicatorsOutput indicatorsOutput indicators Implementing Implementing Implementing Implementing



strategy strategy strategy strategy

Design and

implement a

feedback mechanism

Effective feedback

system

Timely feedback to

members

Increased feedback

from members

Identified members’

expectations

Comprehensive

feedback system in

place

Statistics on feedback

“

Periodic members’

expectation report

CMC/ GM/ CRO Immediate

Develop and display

a customer service

CHARTER

Customer service

charter developed

Improved service

delivery and

increased productivity

Customer service

charter displayed

CMC/ GM /

departmental

heads

June 2008

Set up a notice

board/bulletin for

the SACCO

Faster communication

to the members

Notice board/bulletin

in place

GM/ ICT

Manager

June 2008

Develop a member

education

programme

Member education

programme in place

Increased members

participation

Member education

programme adopted

CMC / GM Immediate Enhance

members’

education

Implement the

programme

Increased members’

awareness and

patronage of SACCO

products and services

No. of education

seminars held’

No. of members

trained

CMC / GM Immediate &

continuous

Increased member

participation

_________________________________________________________________________________________________________________________________


24

Objective 2: Objective 2: Objective 2: Objective 2: To increase awareness anTo increase awareness anTo increase awareness anTo increase awareness and patronage of the SACCO products and services d patronage of the SACCO products and services d patronage of the SACCO products and services d patronage of the SACCO products and services from the current 60% from the current 60% from the current 60% from the current 60% to 100%to 100%to 100%to 100% of of of of

membersmembersmembersmembers....

StrategyStrategyStrategyStrategy ActivityActivityActivityActivity Expected outputExpected outputExpected outputExpected output Output indicatorsOutput indicatorsOutput indicatorsOutput indicators Implementing Implementing Implementing Implementing



strategystrategystrategystrategy

Formulate a

marketing policy

A comprehensive

marketing policy

developed

Policy document in

place

HR &

Education

committee/

GM/ CRO

August 2008

Develop a

comprehensive

marketing plan

Marketing plan

developed

Marketing plan

document in place

HR &

Education

committee/

GM/ CRO

August 2008

Strengthen

marketing

operations

Implement the new

marketing plan

Enhanced and prudent

marketing management

Increased marketing

activities

% Increase in the use

of SACCO products

and services

Increased membership

CMC/ GM/

CRO

September

2008 and

continuous


SACCO products and

services

Increased membership

Prudent marketing

management

Undertake intensive

marketing

Increased marketing

activities


SACCO products and

services

Number of adverts

Number of inquiries

on SACCO

products/services

Increased patronage of

SACCO products and

services

HR/Education

committee/

GM/ CRO

September

2008 and

continuous

Create

awareness to

existing and

potential

customers of

the SACCO

products and

services

Update SACCO

website with the

current products

and services

Updated SACCO

website

Increased awareness /

communication

Up-to-date

information on the

website

Audit & IT

Committee /

ICT Manager/

departmental

heads

September

2008 and

continuous

Increased no. of

members accessing the

SACCO products and

services

_________________________________________________________________________________________________________________________________


25





Undertake

marketing by

visiting the

different UN

agencies and those

outside UN complex

(direct marketing,

outreach

campaigns)

Increased awareness,

membership and

patronage of the SACCO

products

% increase in SACCO

membership

Volume of business

Patronage (no. of

members using

SACCO products)

HR/Education

committee/

GM/ CRO

September

2008 and

continuous

Growth in volume of

business

Carry out customer

survey

Identification of

customer needs

Customer survey

report

CMC/ GM/

CRO

January 2009

and half yearly

Undertake product

research and

development

Competitive products/

services in place

Identification of

customer needs

Number of new

products/services

Finance &

Investment

committee /

GM/ CRO/

departmental

heads

September

2008 and

continuous

Review and

introduce

new

products/ser

vices and

channels

Appraise

partnerships with

other institutions

e.g. Western Union,

ATM service

providers

Reduction in operation

costs

Increase in product

range

No. of partnerships

created

No. of new

products/services

launched

% reduction in

operating costs

CMC/ GM September

2008 and

continuous

New relevant

products/services and

channels introduced

_________________________________________________________________________________________________________________________________


26

Objective 3:Objective 3:Objective 3:Objective 3: To improve efficiency and To improve efficiency and To improve efficiency and To improve efficiency and effectiveness of the SACCO operations by reducing staff and operating costs to below effectiveness of the SACCO operations by reducing staff and operating costs to below effectiveness of the SACCO operations by reducing staff and operating costs to below effectiveness of the SACCO operations by reducing staff and operating costs to below

10% of total income.10% of total income.10% of total income.10% of total income.





Develop ICT Policy Harmonised/Increased

use of ICT in SACCO

operations

ICT policy in place GM/ Audit &

IT Committee/

Manager

July 2008

Undertake ICT

needs assessments

ICT infrastructure gaps

identified

Review report CMC/ GM/ ICT

Manager

Semi annually

Acquire necessary

software &

hardware

e.g. Reconciliation

system, electronic

reporting system

Improved service

delivery

Necessary hardware

and software installed

CMC/ GM/ ICT

Manager

based on needs

assessment

Enhance the

use of ICT in

the SACCO

operations

Undertake staff

training on use of

ICT

Improved productivity

and service to members

No. of staff trained GM/ ICT

Manager / HR

& Education

Committee

As per TNA

Increased and better

use of ICT

Undertake processes

review

Integrated operations in

place

Seamless operations

New processes in place

Time taken to serve

customers

Customer complaints

CMC/ GM/

departmental

heads

June – Dec

2008

Review and

update

business

processes

Develop and

implement

operational policies

and procedures in

all areas.

Increased operational

efficiency

Standardised mode of

operation

Appropriate policies

and procedures in

place

CMC/ GM/

departmental

heads

June – Dec

2008

Integration of all

processes

Reduction of

processing time and

costs

Reduced customer

complaints

Appropriate

delegation

Review roles and

responsibilities of

CMC, SC, sub-

committees

manager and other

employees

Clear lines of authority

and timely decisions

Level of delegation

Time taken to make

decisions

CMC/ GM/ HR June 2008 Increased operational

efficiency

_________________________________________________________________________________________________________________________________


27

Objective 4:Objective 4:Objective 4:Objective 4: To increase To increase To increase To increase institutional capital to institutional capital to institutional capital to institutional capital to 6666% of the total assets% of the total assets% of the total assets% of the total assets....

StrategyStrategyStrategyStrategy ActivitiesActivitiesActivitiesActivities Expected outputExpected outputExpected outputExpected output Output indicatorsOutput indicatorsOutput indicatorsOutput indicators Implementing Implementing Implementing Implementing


Time lineTime lineTime lineTime line Expected outcome of Expected outcome of Expected outcome of Expected outcome of


Growth of

retained

earnings

Develop and

implement a

dividend policy

Increased funds for

growth in the next 5

years

Dividend policy in

place

Amounts of retained

earnings and statutory

reserves in the balance

sheet

CMC/Finance

& investment

committee /GM

/FM

September 2008 Increased

profitability

Developing a

robust

portfolio

management

mechanism

Develop the

investment policy

to ensure maximum

return to the

SACCO

Increased return to the

SACCO from

investments

Better risk management

approaches

Better investment

decisions

Investment policy in

place

Reduced risk exposure

Income levels

CMC/ Finance

& Investment

committee

December 2008 Increased income

from investments

(per unit of risk)

Review the loan

management

policies and

procedures

Reduced loan

delinquency rate

Revised policies and

procedures

CMC / Credit

committee/

FOSA

committee/ GM

Immediate

Develop a close

working

relationship and

networks with

employers

Timely remittance of

members deductions

and recovery of loans

Cases of remittance

delay

Amount of bad debts

GM/ ICT

Manager/ FOSA

Manager

Immediate

Enhance loan

recovery

Educate members

on the need to pay

loans on time

Positive cash flows and

timely loan repayment

Loan default cases

CMC/ Credit

committee/ GM

Immediate

Reduced loan

delinquency

_________________________________________________________________________________________________________________________________


28

StrategyStrategyStrategyStrategy ActivitiesActivitiesActivitiesActivities Expected outputExpected outputExpected outputExpected output Output indicatorsOutput indicatorsOutput indicatorsOutput indicators Implementing Implementing Implementing Implementing


Time lineTime lineTime lineTime line Expected outcome of Expected outcome of Expected outcome of Expected outcome of


Increase the

available

funds for

lending /

Investments

Develop products

that encourage

savings deposits

Increased return to the

SACCO

Savings, loans and

investment funds

CMC/ Finance

& Investment

committee

Continuous Increased

profitability

Management

of financial

risks

Analysis of financial

risks

Optimum management

of financial risks

Level of financial risks

CMC/ Finance

& Investment

committee/

GM /

Continuous Increased

performance

_________________________________________________________________________________________________________________________________


29

Objective 5: Objective 5: Objective 5: Objective 5: To attract, develop and retain a highly skilled, motivated and disciplined staff foTo attract, develop and retain a highly skilled, motivated and disciplined staff foTo attract, develop and retain a highly skilled, motivated and disciplined staff foTo attract, develop and retain a highly skilled, motivated and disciplined staff for enhanced performance.r enhanced performance.r enhanced performance.r enhanced performance.



TimelineTimelineTimelineTimeline Expected outcome Expected outcome Expected outcome Expected outcome

of the strategyof the strategyof the strategyof the strategy

Review current HR

policy

Clear guidelines on

HR issues

Revised HR policy

in place

CMC/ HR &

Education

committee/ GM

Aug- Oct 2008

Develop job description

and specifications

Motivated and

productive staff

Job description and

specifications in

place

HR & Education

committee / GM

Aug- Oct 2008

Develop a scheme of

service (Career path)

Motivated and

productive staff

Scheme of service

developed

HR & Education

committee / GM

Aug- Oct 2008

Review the terms and

condition of service

Motivated staff Reviewed terms and

conditions of service

in place

CMC/ HR &

Education

committee / GM

Aug- Oct 2008

Adopt best

practices in HR

management

Develop and implement

staff career development

scheme / programme

Skilled and

motivated staff

Operational career

development

program in place

HR & Education

committee / GM

Aug- Oct 2008

Motivated and

productive staff

Undertake staff Training

Needs Assessment (TNA)

Training needs

identified

TNA Report

completed

HR & Education

committee / GM

Annually

Prepare training

programme

Organised training

of staff

Training programme

in place

HR & Education

committee / GM

Annually

Strengthen staff

skills

Undertake training Informed, motivated

and productive staff

No. of training

sessions held

No. of staff trained

HR & Education

committee /GM

Annually

Increased staff

productivity

Design staff appraisal

system

Streamlined

appraisal system

Staff appraisal

system developed

HR & Education

committee / GM

Immediate Design and

implement a

performance

management

system

Implement the new

appraisal system

Motivated and

productive staff

Operational system

in place

HR & Education

committee / GM

Immediate and

continuous

Improved

performance

_________________________________________________________________________________________________________________________________


30



TimelineTimelineTimelineTimeline Expected outcome Expected outcome Expected outcome Expected outcome


Review staff health

scheme

Healthy workforce Health scheme in

place

CMC/ HR &

Education

committee / GM

Immediate and

yearly

Sensitize staff on health

related issues

Healthy workforce No. of sensitization

seminar held

HR & Education

committee / GM

Immediate and

continuous

Facilitate access to

counselling services on

health issues

Healthy workforce No. and type of

services offered

HR & Education

committee / GM

Immediate &

Continuous

Enhance staff

welfare

Ensure safe and

conducive workplace

Safe workplace

Health workforce

Absence of safety

related incidences

Reduced staff

absence / sick leave

HR & Education

committee / GM

Immediate &

Continuous

Improved staff

welfare

_________________________________________________________________________________________________________________________________


31

ObjectiveObjectiveObjectiveObjective 6: 6: 6: 6: To enhance To enhance To enhance To enhance performance management in theperformance management in theperformance management in theperformance management in the SACCO. SACCO. SACCO. SACCO.

StrategyStrategyStrategyStrategy

ActivitiesActivitiesActivitiesActivities Expected outputExpected outputExpected outputExpected output Output indicatorsOutput indicatorsOutput indicatorsOutput indicators Implementing Implementing Implementing Implementing


Time lineTime lineTime lineTime line Expected outcome Expected outcome Expected outcome Expected outcome


Develop clear

organizational/

departmental targets

and key performance

indicators (KPIs)

Performance targets and

KPIs developed

Improved productivity

Key performance

targets achieved

No. of members’

complaints

Level of members’

satisfaction

CMC/ GM September 2008

and continuous

Develop clear TORs

for all committees

Clarity of the role of each

committee and better

accountability

Clear work plans of

committees

Revised TORs for the

committees in place

CMC/ SC September 2008

and continuous

Develop and

implement a

performance

management

system

Develop and

implement

monitoring and

evaluation system

Feedback and better

management of SACCO

Monitoring and

operational

evaluation system in

place

M&E reports

CMC/ SC/ GM Immediate and

continuous

Improved SACCO

performance

Develop tracking and

reporting system

Timely & consistent

implementation of

decisions

Tracking and

reporting system in

place


continuous

Ensure timely

and consistent

implementatio

n of decisions Align activities with

available resources

Prioritized list of

activities

Efficiency in

implementation of

decisions

Full implementation of

decisions

Schedule of activities

and resources needed

Implementation

status reports


continuous

Improved

performance

Full

implementation of

strategic plan

_____________________________________________________________________________________________


32

CHAPTER SIXCHAPTER SIXCHAPTER SIXCHAPTER SIX

INSTIINSTIINSTIINSTITUTIONAL STRUCTURE TUTIONAL STRUCTURE TUTIONAL STRUCTURE TUTIONAL STRUCTURE

This chapter presents the institutional structure covering the general meeting, CMC, SC,

office of the General Manager, description of the departments and their functions,

organizational chart (organogram) and proposed staff establishment.

6.16.16.16.1 THE GENERAL MEETINGTHE GENERAL MEETINGTHE GENERAL MEETINGTHE GENERAL MEETING

The supreme authority of the SACCO is vested in the general meeting of members. The

powers of the general meeting are provided in the By-law 41.

6.26.26.26.2 CENTRAL MANAGEMENT COMMITTEECENTRAL MANAGEMENT COMMITTEECENTRAL MANAGEMENT COMMITTEECENTRAL MANAGEMENT COMMITTEE

The CMC is the governing authority of the SACCO as directed by the members at the

general meetings. The CMC is responsible for policy direction of the affairs of the SACCO.

The functions and responsibilities of the CMC are provided in By-law 45.

The CMC discharges its responsibilities through delegation to sub-committees made up of

the members of the CMC. Currently, there are five sub-committees namely: the Executive,

Credit, Finance & Investment, Audit & IT, and HR & Education.

6.36.36.36.3 SUPERVISORY COMMITTEESUPERVISORY COMMITTEESUPERVISORY COMMITTEESUPERVISORY COMMITTEE

The SC is responsible for ensuring the SACCO’s compliance with applicable laws and

internal controls. In addition, it has the role of establishing the truth and accuracy of the

SACCO’s financial condition as well as ensuring that the administrative practices and

procedures are adequate to safeguard member’s and the SACCO’s rights and interests. The

powers and duties of the SC are provided in By-law 65.

6.46.46.46.4 THE OFFICE OF THE GENERAL MANAGERTHE OFFICE OF THE GENERAL MANAGERTHE OFFICE OF THE GENERAL MANAGERTHE OFFICE OF THE GENERAL MANAGER

As the Chief Executive Officer of the Society, the office of the General Manager is created

under By-law 56. The holder of the office shall have the following powers and duties among

others:

i. Managing the affairs of the Society in a competent and professional manner.

ii. Ensuring that proper books of accounts, records and returns are kept and that regular

financial, statistical and operational information is prepared and submitted to the

management committee, the Ministry of Co-operative Development and Marketing,

_____________________________________________________________________________________________


33

and other stakeholders and shall be responsible for ensuring the accuracy of that

information.

iii. Attending central management committee meetings and the Annual General Meetings

in an advisory capacity.

iv. Preparing Society’s business plan and budget for approval by the central management

committee.

v. Providing information required by the supervisory committee in time.

vi. Developing and recommending the human resource policies and plans for the

management committee’s approval.

vii. Responsible for the security of funds and assets of the Society.

viii. Directing and supervising the administration and processing of loan applications.

ix. Advising and developing new products and services to satisfy the members’ needs.

x. Ensuring implementation without delay of all decisions made by committees of the

Society.

xi. Ensuring there is effective communication between the management and the CMC.

6.56.56.56.5 DEPDEPDEPDEPARTMENTSARTMENTSARTMENTSARTMENTS

Analysis of the current and expected future operations of the SACCO resulted in the

establishment of five (5) departments as follows:

1. Credit department

2. FOSA department

3. Finance and Administration department

4. Information and Communication Technology (ICT) department

5. Internal Audit department

These departments are explained in sections 6.5.1 to 6.5.5.

6.5.16.5.16.5.16.5.1 Credit departmentCredit departmentCredit departmentCredit department

The credit department services shall consist of administering loans in accordance with the

lending policy of the society. It will be headed by a Credit Manager who will be responsible

to the General Manager. The core functions of the department are to:

i. Facilitate formulation and implementation of the lending policies and procedures;

ii. Process, appraise and recommend loan applications;

iii. Coordinate all activities in relation to lending;

iv. Handle loan enquiries;

v. Offer financial advisory services to members;

vi. Take necessary action to recover loans; and

vii. Perform any other duties incidental to the functions of the credit department as approved

by the CMC.

_____________________________________________________________________________________________


34

6.5.26.5.26.5.26.5.2 FOSA departmentFOSA departmentFOSA departmentFOSA department

The FOSA department will be responsible for developing and offering a wide range of

financial services to its customers. The department will be headed by a FOSA Manager who

will be responsible to the General Manager. The core functions of the department include:

i. Formulation and implementation of the FOSA policies, procedures and practices;

ii. Developing and implementing a marketing strategy for the SACCO;

iii. Mobilization of deposits;

iv. Management of savings;

v. Undertaking member and customer education on various products/services;

vi. Offering cash withdrawal services;

vii. Offering funds transfer services;

viii. Provision of financial advisory services to members/customers;

ix. Planning and implementing aggressive members and customer drive;

x. Employing requisite customer care strategies to recruit and maintain client; and

xi. Performing any other duties incidental to the functions of the FOSA department as

approved by the CMC.

6.5.36.5.36.5.36.5.3 Finance Finance Finance Finance and Administration and Administration and Administration and Administration departmentdepartmentdepartmentdepartment

The finance and administration department services will consist of financial control,

accounting and administration of the Society. It will be headed by a Finance Manager who

will be responsible to the General Manager.

The core functions of the department are:

i. Formulation and implementation of financial and accounting policies and procedures;

ii. Formulation and implementation of administration and human resource policies and

procedures;

iii. Authorization of commitments and contractual obligations;

iv. Preparation of all annual financial and administrative reports for the Society;

v. Preparation, implementation, control and coordination of all services related to the

budget;

vi. Coordination of all projects and follow-up on reimbursement claims;

vii. Coordination of funding proposals;

viii. Expenditure monitoring and reporting;

ix. Enhancing compliance with Ministry of Co-operatives requirements on financial

management;

x. Procurement and supplies management; and

xi. Performing any other duties incidental to the functions of the finance department as


_____________________________________________________________________________________________


35

6.5.46.5.46.5.46.5.4 InfInfInfInformation, Communication and Technology departmentormation, Communication and Technology departmentormation, Communication and Technology departmentormation, Communication and Technology department

The information communication and technology (ICT) department services will consist of

management of the information, communication and technology needs of the Society. It will

be headed by an ICT Manager who will be responsible to the General Manager. The core

functions of the department are:

i. Formulation and implementation of ICT policies and procedures;

ii. Development, implementation and management of computerised information system;

iii. Providing appropriate information and guidance on emerging trends and best practices in

ICT to enable the Society achieve competitive advantage, compliance and to optimise

usage of technology;

iv. Ensuring timely provision of ICT service to all the functions of the society;

v. Ensuring a well coordinated information dissemination systems with sufficient controls

to capture and process data;

vi. Ensuring that all ICT equipments are in good working condition;

vii. Coordination and updating of the SACCO website; and

viii. Performing any other duties incidental to the functions of the ICT department as


6.5.56.5.56.5.56.5.5 Internal Audit dInternal Audit dInternal Audit dInternal Audit departmentepartmentepartmentepartment

The Internal Audit Department services consist of ensuring that the internal control systems

throughout the UN SACCO are adequate and are complied with. It will be responsible to the

SC. The core functions of the Department include:

i. Making recommendations for improving internal controls throughout the Society;

ii. Assessing the reliability and integrity of financial and operating information and

ensuring they comply with set policies;

iii. Monitoring and constantly reviewing audit programmes for all the sections in the

Department;

iv. Investigating irregularities identified and reporting on any wastage of SACCO funds;

and

v. Performing any other duties incidental to the functions of the Internal Audit

department as approved by the CMC.

The new organization structure is as depicted in section 6.6. However, some of the positions

will be filled as need arises. HR and administration issues will be handled by the GM assisted

by the administrative Assistant as per the current practice.

_________________________________________________________________________________________________________________________________________________


36

6.66.66.66.6 ORGANIZATIONAL STRUCTUREORGANIZATIONAL STRUCTUREORGANIZATIONAL STRUCTUREORGANIZATIONAL STRUCTURE

Figure 5: New organizational structure

*The internal audit function is currently outsourced.

Note:Note:Note:Note: 1. Not all positions need to be filled immediately

2. Structure not indicative of the grade level.

AGM

Central

Management

Committee

General Manager

Credit

Manager

FOSA

Manager

Finance & Administration

Manager

ICT Manager

Credit Officer

Teller

Customer

Relations

Officer

Accountant

Administrative

Assistant

Systems

Administrator

Supervisory

Committee

Internal

Audit*

FOSA Officer

Credit

Assistant Accounts

Assistant

Office

Assistant

_____________________________________________________________________________________________


37

6.76.76.76.7 PROJECTED STAFF ESTABLISHMENTPROJECTED STAFF ESTABLISHMENTPROJECTED STAFF ESTABLISHMENTPROJECTED STAFF ESTABLISHMENT

The projected staff establishment for the next five years is shown in Table 7.

Table 7: Projected staff establishment

PositionPositionPositionPosition In postIn postIn postIn post

JuneJuneJuneJune 2008 2008 2008 2008

2009200920092009 2010201020102010 2020202011111111 2012201220122012

General Manager 1 1 1 1 1

Administrative Assistant 0 1 1 1 1

Credit Manager 0 1 1 1 1

Credit Officer 1 1 2 2 2

Credit Assistant 1 1 1 1 1

FOSA Manager 0 0 0 0 1

Customer Relations Officer 1 1 1 1 1

FOSA Officer 0 0 1 1 1

Teller 2 2 2 2 2

Finance & Administration Manager 0 0 1 1 1

Accountant 1 1 1 1 1

Accounts Assistant 2 2 2 2 2

Office Assistant 1 1 1 1 1

ICT Manager 0 1 1 1 1

Systems Administrator 1 1 1 1 1

TOTALTOTALTOTALTOTAL 11111111 11114444 11117777 11117777 11118888

_____________________________________________________________________________________________


38

CHAPTER SEVENCHAPTER SEVENCHAPTER SEVENCHAPTER SEVEN

MONITORING AND EVALUAMONITORING AND EVALUAMONITORING AND EVALUAMONITORING AND EVALUATION TION TION TION

This chapter presents the monitoring and evaluation framework of the implementation of

the strategic plan, the key performance indicators and financial projections

7.17.17.17.1 OBJECTIVES OF MONITORING AND EVALUATIONOBJECTIVES OF MONITORING AND EVALUATIONOBJECTIVES OF MONITORING AND EVALUATIONOBJECTIVES OF MONITORING AND EVALUATION

Monitoring and evaluation (M&E) is a critical component geared towards ensuring that the

various strategies are implemented. Monitoring is an ongoing process of data collection that

allows managers in an organization to examine positive and negative trends and adjust their

strategies accordingly. It focuses on measuring all aspects of an organisations’ strategy

implementation: inputs, processes (systems and procedures), outputs and

impact/consequences.

Evaluation is the process of assessing the value of an activity, project or programme.

Evaluation helps programme participants to answer the critical question “what is the value of

this activity”.

Identification of strategic issues and subsequently defining appropriate objectives, strategies

and action plans cannot ensure success. To succeed the strategic plan must be carefully

executed. Successful implementation of the plan requires putting in place an adequate M&E

framework right at the onset.

7.27.27.27.2 MONITORING AND EVALUATION FRAMEWORKMONITORING AND EVALUATION FRAMEWORKMONITORING AND EVALUATION FRAMEWORKMONITORING AND EVALUATION FRAMEWORK

The following M&E framework will be put in place by the UN SACCO in order to ensure

successful implementation of the strategic plan: -

1. The executive committee will oversee successful implementation of the strategic plan.

2. The executive committee will be reporting regularly (preferably quarterly) to the CMC

on the progress of the strategic plan implementation.

3. All heads of departments will hold regular meetings (preferably monthly) chaired by the

General Manager, to review the status of the strategic plan implementation as it relates to

their respective departments.

4. The key performance indicators shown in section 7.3 and the activities, timelines and

output indicators in the implementation plan will provide basis for performance

evaluation and reporting.

_____________________________________________________________________________________________


39

5. The GM and departmental heads will breakdown the key performance indicators in

section 7.3 and activities in the implementation plan into monthly and quarterly targets

for effective and efficient monitoring and evaluation.

6. Progress reporting on the strategic plan implementation by the Executive committee will

be on quarterly basis and monthly for departmental heads. The reporting will address

activities falling due within the quarter/month. The following template will be used for

performance evaluation and reporting:

Activity Activity Activity Activity

Department Department Department Department

responsibleresponsibleresponsibleresponsible

Output Output Output Output

indicatorindicatorindicatorindicator

Period Period Period Period

achievement/Output achievement/Output achievement/Output achievement/Output

VarianceVarianceVarianceVariance ExplanationExplanationExplanationExplanation Way forwardWay forwardWay forwardWay forward

1

2

3

4

7.37.37.37.3 KEY PERFORMANCE INDICATORSKEY PERFORMANCE INDICATORSKEY PERFORMANCE INDICATORSKEY PERFORMANCE INDICATORS

The following table shows overall current and projected key performance indicators for the

SACCO.

Table 8 SACCO’s overall current and projected key performance indicators

YearYearYearYear 2007200720072007 2008200820082008 2009200920092009 2010201020102010 2011201120112011 2012201220122012

1 No. of members 2,876 3,077 3,385 3,724 4,096 4,506

Growth in members 4% 7% 10% 10% 10% 10%

2 Members deposits (Ksh millions) 2,068.2 2,434.02 2,945.42 3,564.44 4,312.55 5,218.65

Growth rate 18% 18% 21% 21% 21% 21%

3 Loans outstanding (Ksh millions) 2,399.0 2,816.37 3,413.18 4,135.03 5,013.42 6,078.53

Growth rate 17% 21% 21% 21% 21% 17%

4 Interest income 395.7 478.78 580.24 702.96 852.28 1,033.35

Growth rate 16% 17% 17% 17% 17% 17%

5 Staff costs (Ksh millions) 21.50 29.35 33.19 39.82 44.43 52.14

Staff costs/total income 5% 6% 6% 6% 5% 5%

6 No. of employees 10 11 14 17 17 18

7 Operating costs(Ksh millions) 22.7 19.92 24.14 29.24 35.45 42.99

Operating costs/ total income 4% 4% 4% 4% 4% 4%

8 Finance costs (Ksh millions) 349.2 413.78 500.72 605.95 733.13 887.17

Finance costs/total income 85% 83% 83% 83% 83% 83%

9 Surplus (Ksh millions) 15.1 34.19 43.81 53.14 71.84 95.14

Surplus/ total income 4% 7% 7% 7% 8% 9%

10 Retained surplus (Ksh millions) 13.3 23.93 30.66 37.20 50.29 66.60

Retained surplus/ total income 3% 5% 5% 5% 6% 6%

_____________________________________________________________________________________________


40

7.47.47.47.4 FINANCIAL PROJECTIONSFINANCIAL PROJECTIONSFINANCIAL PROJECTIONSFINANCIAL PROJECTIONS

7.4.17.4.17.4.17.4.1 Key assumptionsKey assumptionsKey assumptionsKey assumptions

2008200820082008 2009200920092009 2010201020102010 2222011011011011 2012201220122012

1. Membership growth rate 7% 10% 10% 10% 10%

2. Employees 13 14 16 16 16

3. Interest on loans 17% 17% 17% 17% 17%

4. Increase in average cost per employee 7.5% 7.5% 7.5% 7.5% 7.5%

5. Other income/interest on loans 4% 4% 4% 4% 4%

6. Operating costs/total income 4% 4% 4% 4% 4%

7. Finance costs/loans 17% 17% 17% 17% 17%

8. Statutory reserve rate/surplus 20% 20% 20% 20% 20%

9. Growth rate of members average deposit 10% 10% 10% 10% 10%

10. Long-term loans/total loans 80% 80% 80% 80% 80%

11. Growth rate in equipment 5% 5% 5% 5% 5%

12. No additional investments have been provided. However, two bonds will mature within the planning

period, one in 2008 and the other in 2011.

13. Changes in debtors and prepayments are proportional to changes in members’ deposits.

14. Short-term investments vary proportionately with changes in the interest on members’ deposits.

15. Changes in term deposits are proportional to changes in the interest on members’ deposits.

16. Changes in cash and bank balances are proportional to changes in the interest on members’ deposits.

17. Change in creditors and accruals is at 4%, which is the percentage of operating costs divided by total

income.

18. Members’ savings deposits increase is proportional to the increase in members’ deposits.

7.4.27.4.27.4.27.4.2 Projected income statementsProjected income statementsProjected income statementsProjected income statements

2007200720072007 2008200820082008 2009200920092009 2010201020102010 2011201120112011 2012201220122012

Ksh Ksh Ksh Ksh

millionsmillionsmillionsmillions

Ksh Ksh Ksh Ksh


Ksh Ksh Ksh Ksh


Ksh Ksh Ksh Ksh


Ksh Ksh Ksh Ksh


Ksh Ksh Ksh Ksh


Income 413.2 497.9 603.9 732.1 888.1 1077.8

ExpensesExpensesExpensesExpenses

Staff costs 21.5 30.0 34.8 42.7 45.9 49.4

Operational and administrative

costs 22.7 19.9 24.2 29.3 35.5 43.1

44.244.244.244.2 50.050.050.050.0 58.958.958.958.9 72.072.072.072.0 81.581.581.581.5 92.592.592.592.5

Surplus before finance costsSurplus before finance costsSurplus before finance costsSurplus before finance costs 364.3 448.0 544.9 660.0 806.6 985.3

Finance costs 349.2 413.8 500.7 606.0 733.1 887.2

Surplus 15.1 34.2 44.2 54.1 73.5 98.2

Retained earnings 10.6 23.9 30.9 37.9 51.5 68.7

_____________________________________________________________________________________________


41

7.4.37.4.37.4.37.4.3 Projected balance sheetsProjected balance sheetsProjected balance sheetsProjected balance sheets

2007200720072007 2008200820082008 2009200920092009 2010201020102010 2011201120112011 2012201220122012

Actual Actual Actual Actual

Ksh Ksh Ksh Ksh


Ksh Ksh Ksh Ksh


Ksh Ksh Ksh Ksh


Ksh Ksh Ksh Ksh


Ksh Ksh Ksh Ksh


Ksh Ksh Ksh Ksh


Non current assetsNon current assetsNon current assetsNon current assets

Equipment 5.6 5.88 6.17 6.48 6.81 7.15

Operating lease 6.6 5.10 3.60 2.10 0.60 -

Investments 31.0 21.0 21.0 21.0 11.0 11.0

Loans to members 1,829.0 2,254.1 2,731.8 3,309.7 4,012.2 4,865.5

Bond premium 0.8 0.6 0.4 0.2 0

1,873.0 1,873.0 1,873.0 1,873.0 2,286.7 2,286.7 2,286.7 2,286.7 2,762.9 2,762.9 2,762.9 2,762.9 3,339.5 3,339.5 3,339.5 3,339.5 4,030.6 4,030.6 4,030.6 4,030.6 4,883.6 4,883.6 4,883.6 4,883.6

Current assCurrent assCurrent assCurrent assetsetsetsets

Operating lease 1.5 1.5 1.5 1.5 1.5 0.6

Debtors and prepayments 26.1 30.7 37.2 45.0 54.4 65.9

Loans to members 569.2 563.5 682.9 827.4 1003.0 1216.4

Term deposits 52 55.57 67.25 81.38 98.46 119.14

Investments 88 94.04 113.80 137.72 166.62 201.63

Cash and bank balances 121.5 139.84 169.22 204.79 257.77 311.93

858.3858.3858.3858.3 885.2885.2885.2885.2 1071.91071.91071.91071.9 1297.81297.81297.81297.8 1581.81581.81581.81581.8 1915.51915.51915.51915.5

Current liabilitiesCurrent liabilitiesCurrent liabilitiesCurrent liabilities

Interest on members share

capital 387.2 413.78 500.72 605.95 733.13 887.17

Creditors and accruals 22.4 23.3 24.2 25.2 26.2 27.3

Taxation 0.2 0.2 0.2 0.2 0.2 0.2

Members savings accounts 131.4 154.6 187.1 226.5 274.0 331.6

Honorarium 0.6 0.63 0.66 0.69 0.73 0.77

541.8541.8541.8541.8 592.6592.6592.6592.6 712.9712.9712.9712.9 858.5858.5858.5858.5 1034.31034.31034.31034.3 1246.91246.91246.91246.9

Net current assetsNet current assetsNet current assetsNet current assets 316.5316.5316.5316.5 292.6292.6292.6292.6 358.9358.9358.9358.9 439.3439.3439.3439.3 545454547.67.67.67.6 668.6668.6668.6668.6

Total assetsTotal assetsTotal assetsTotal assets 2,190.0 2,190.0 2,190.0 2,190.0 2,579.3 2,579.3 2,579.3 2,579.3 3,121.9 3,121.9 3,121.9 3,121.9 3,778.7 3,778.7 3,778.7 3,778.7 4,578.2 4,578.2 4,578.2 4,578.2 5,552.2 5,552.2 5,552.2 5,552.2

Financed byFinanced byFinanced byFinanced by

Members funds

Share capital 2068.2 2,434.0 2,945.4 3,564.4 4,312.6 5,218.7

Retained earnings 91.5 110.8 135.4 165.4 205.8 259.4

Entrance fees 1.1 1.2 1.5 1.9 2.7 3.7

Statutory reserves 28.5 33.32 39.49 46.97 57.08 70.47

2,190.0 2,190.0 2,190.0 2,190.0 2,579.3 2,579.3 2,579.3 2,579.3 3,121.9 3,121.9 3,121.9 3,121.9 3,778.7 3,778.7 3,778.7 3,778.7 4,578.2 4,578.2 4,578.2 4,578.2 5,552.2 5,552.2 5,552.2 5,552.2

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Transcript of STRATEGIC PLANSTRATEGIC PLAN 2008 –2008 ––– … sacco final strategic plan.pdf · with...