By Hezron Roy
CPA Frederick Abuyabo is the Chief Executive Officer for Ufanisi Deposit Taking (DT) Sacco, which was registered in July 6, 1973 as a Savings and Credit Society for employees of Agricultural Finance Corporation (ADC) that has since opened its membership to the public.
The Sacco Society was registered with Sacco Society Regulatory Authority (SASRA) on July 22, 2013 with major objectives of encouraging thrift among its members by affording them an opportunity to accumulate their savings, creating a source of funds where its members can borrow at a fair and reasonable interest rate and to provide its members with credit for provident and productive purposes.
Abuyabo who has held the CEO position at Ufanisi DT Sacco since 1998 to date, has gone through various ranks in the Sacco movement with over 30 years’ experience speaks elaborately on his experience in the Sacco movement and the emerging issues in the movement in a recent interview with Sacco Review reporter Roy Hezron.
Here, Abuyabo talks about his life in the Sacco movement, achievement he has realize for the Sacco as the CEO since when he took over notably increasing Ufanisi DT Sacco asset base from Sh54.23 million in 1998 when he took over the Sacco leadership to the current Sh365 million in 2021 and reducing loan backlog from six months to daily disbursements. Here are excerpts from the interview.
Tell us more about yourself and your life in the Co-operative movement: I have 36 years in the Co-operative movement with four years in Marketing Co-operative Society that is from July1985 to April 1989 where I served as Secretary Manager and 32 years in Savings and Credit Co-operatives (Saccos). Of these 32 years in Sacco movement, I served Bungoma Teachers Sacco for nine years from May 1989 to January 1998 and 23 years in Ufanisi DT Sacco from February 1998 as the CEO to date.
In Sacco, I grew from a book keeper to the current position of a CEO and I have gone through all ranks in the movement. Those days, Banks were closing at mid-day and District Cooperative Officers’ (DCO) signature was mandatory for any loan to be disbursed.
The Co-operative Movement has grown due to liberation that now requires close supervision from the regulators and the elected officials should be vetted for the security of members’ funds, and I appreciate the members, Board, Supervisory and staff for having trust in me to bring the change that the translated to one day turnaround time.
What achievements have you personally realized for Ufanisi DT Sacco since you took over? For the period I have been the CEO for this Sacco since 1998, I have enabled the Sacco to be among the first registered as a Deposit Taking Saccos by SASRA. I have also reduced loan backlog from six months to daily disbursements, increased members loyalty to the Sacco and above all increasing the asset base from Sh54.23Million in 1998 to the current Sh365Million in 2021.
What are the secrets behind the success? Prioritizing members’ interests is key, adhering to Sacco requirements to the letter and recognizing that all members are equal- First come first serve basis as per industry motto.
What are the expansion priorities and goals put in place by the Sacco moving forward? The priorities and goals are to ensure that the Sacco has purchased its own office space and land to increase members’ earnings by not paying rent and to empower members through members trainings that will enable them make prudent financial decisions, increase savings, elect their representatives wisely, and improve turnaround time in the Sacco operations.
Any plans in place for new products and services? We are planning to offer members short term online digital financial services at affordable rates and to partner with other financial firms to establish microfinance department, the Small and Medium-Sized Enterprises (SMES).
There have been concerns over the rising number of loan defaulters in the Sacco Sector; do you support the move of using auctioneers to recover the Sacco loan and dealing with defaulters? For Saccos that use collateral while lending, the terms of the loan should be followed to the letter. However, the Auctioneers should be as a last resort if other means of recovery have failed but it should have a humane face.
The Co-operative principle of members guaranteeing each other is the best since members sort themselves after the Sacco would have recovered the defaulter’s loan.
How do you compare the way Sacco members use loans they acquire from Saccos before and currently, were there any restrictions attached regarding the loan before and currently? Liberation has brought both advantages and disadvantages to the Co-operative movement. Saccos were created for members to save and to borrow for them to achieve their dreams.
Before liberation, members’ loans were paid to the institution the loan was applied for. If it was for School fees, cheques were written in schools names for various students, medical loan cheque was written to the hospital institution. The main advantage was that at least the loan applied for served the intended purpose.
District Co-operative Officer‘s (DCO) signature was mandatory in the bank for a Co-operative cheque to be paid as a control measure.
For the cheque to be signed the DCO was to go through loan registers, bank statement and the Commissioner was strict on members service delivery, which was “FIRST COME, FIRST SERVE PRINCIPLE”.
Currently Saccos are dealing with members as long as they meet its by-laws and policies. For those Saccos with FOSA services, all loans are channeled through their FOSA Accounts. Many members don’t utilize the loans as per loan purpose in the application form.
What advise can you give to those who take Sacco loans? Sacco members who take Sacco loans should utilize the loan for intended purpose to develop themselves for a loan misused is a burden to the member.
What is your vision for the Sacco in the next 5 years? I have a vision to improve member services turnaround time and increase members’ education sessions and also to ensure that the Sacco has its own premises to reduce operation costs.
What are some of the major challenges facing the Sacco sector in general? Poor recruitment procedures where majority of Sacco personnel in county-based societies are from the same counties, something that has led to ethnicity. There is also lack of liquidity and lack of uniform Information Technology (IT) system in the movement for measurability.
There is a challenge of Cybercrime facing the sector and the Saccos need to remind members on the risk of disclosing their details like Identity card numbers and secret PIN.
Saccos are also facing a challenge on election of Board and Supervisory Committee members where members tend to elect those members who ask many questions during Annual General Meeting (AGM) instead of taking into account the character and how they know the member.
Who is your role model in the Co-operative sector? Mr. Geoffrey Muthui Mwirebua, District Co-operative Auditor in Bungoma in 1985.
How do you utilize your free time? Jogging and light exercises.