Others fear holding up funds in investments

UN Sacco, one of the most liquid in
the industry, has also decided to play
safe. “Our investment wing is still a
baby. So what we concentrate on is
buy land on behalf of the members.
We then seek out those interested for
them to contribute and acquire the
plots. We do not commit Sacco funds
but put out an expression of interest
notice, to be circulated to our worldwide
members, before we put down
any down payment for the piece of
land,” said Evelyn Achieng Olunja,
Head of Marketing- UN Sacco.
While UN Sacco relied on partnership
with a mortgage finance
company, it has since abandoned
this plan after the said firm kept on
shifting the goal posts.
“We have extended the lending
period from short to long term, to 15
years from 8 years. We have also reduced
interest rates from 15.6 per cent
to the present 14.5 per cent, to make
our long term loans more affordable
especially to those working on contracts
with various international UN
organizations,” said Ms Olunja. The
Sacco provides loans to members up
to a maximum of Sh20 million.
“We only provide loan facilities
to members seeking to purchase a
plot of put up a housing unit. But
our responsibility ends up here because
we have a housing co-operatives
unit, which acquires land or
property and then sells them off to
members,” said Loise Metho, Cosmopolitan
Sacco CEO.
She added that with a rate of 1
per cent per month on reducing balance
or 6.5 per cent per year, Cosmopolitan
Sacco offers development
loans that are much cheaper
than what commercial banks offer.
“There is no significant risk
when Saccos purchase or construct
houses because members will occupy
them or rent out the
property. A well maintained
property appreciates in value
and so is the land on which it
is located, so this investment
is attractive and secure,”
said Charles Omwansa, CEO
Gusii Mwalimu Teachers
Sacco Limited.
Omwansa said that Gusii
Teachers has stuck to its core
mandate of providing savings
and credit facilities to members.
It has yet to be licensed
by the Sacco Societies Regulatory
Authority (SASRA) to
operate an investment arm.
“Saccos are able to offer
loans at cheaper rates compared
to commercial banks
to members keen on owning a
plot of land or put up a house.
We only offer loan products
to members intending to purchase
plots or put up houses. This is because
we are yet to reach that level
of capitalization where we can actually
acquire plots or construct
houses and then sell to members,”
saidStanley Kyelenzi, CEO Kwetu
Sacco, which was formerly Masaku
Teachers Sacco.

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