By Benedict Ng’etich
Saving and Credit Societies in Bomet County have been urged to adhere to the recommended key audit ratios if they want to succeed.
Bomet County Government auditor K. Kemboi asked local societies to be compliant on recommended key audit ratios of member’s savings.
“Some key audit ratios like the retained reserves are geared to safeguarding the interest of members when the Sacco encounters financial challenges like in the case of retrenchment or need for emergency funding,” he said.
Flanked by the Sub County Co-operative Officer Wesley Cheruiyot, they called for adherence of the set credit policies, which saves Saccos from serial defaulters.
The officials were speaking to Sotico Sacco officials during this year’s Annual Delegates Conference (ADM) held in Arroket Estate in Sotik.
Cheruiyot lauded the society for practicing prudent fiscal management and urged them to adapt to emerging innovative ways of transacting business, including mobile banking which has already been established.
Sotico Sacco member’s deposits increased by 16 per cent from Sh133,248,671 in 2019 to Sh151,491,288 in 2020.
Sacco chairman Samuel Munyao Nzeki said the trend was encouraging and encouraged members to continue saving for the future and revealed that members from Sotik Tea Company continued to have the highest deposits.
He disclosed that during the year 2020, the society issued a total of Sh186,634,570 in terms of loans compared to Sh141,454,242 issued in the previous year, representing an increase of 32%.
“We continue to charge interest on loans at 12 % per year for development and emergency loans. We also charge 8 % on FOSA advances, “he added.
The chairman said the society faced challenges of member’s defaulting on loan repayment but they tried to assist members with huge unbearable loans by amalgamating them.
He cautioned that the process however seems to be a short term remedy because members find themselves in default again after a short while due to additional loans.
Another challenge was the situation where some members left employment just when they had taken loans when their terminal benefits were not sufficient to cover their balances especially the seasonal employees.
Mr. Munyao urged members to save unwithdrawable deposits which is a key multiplier for loans and urged delegates to be keen on member’s repayment history.
He also called for strict adherence to credit policy to avoid high dependency on loans as the only source of finance and also cautioned members to be wary of the proliferation of shylocks who preying on them.
“An interest of Sh500 for every Sh1,000 over a period of 1 or 2 weeks is a burden that no one should place on another person,” said Munyao.
The Chief Executive Officer Everline Moraa Nyokwoyo thanked the board, delegates and members for being supportive of the operations of the society.
She said they were doing everything possible to satisfy the needs of the members despite the current challenging economic situation.
The CEO said the delegates were pivotal to the Sacco since they were the ambassadors who linked up with other members and the public and encouraged them to recruit more members to increase the liquidity of the society.
