By Jackson Okoth
In an effort to reach out to Savings and Credit Co-operatives (Saccos), SMEP Microfinance Bank is re-engineering its product offerings. The idea is to ensure that Saccos have their needs well catered for.
“We already have several Saccos as our clients who are able to borrow from us at very competitive interest rates. SMEP offers a current account product to Saccos banking with it in addition to a cheque book as well as supply of periodic statements to account holders,” said Symon Kamore, SMEP Chief Executive Officer.
He made these remarks in an exclusive interview with Sacco Review at his offices along Kirichwa Road, off Argwings Kodhek road in Nairobi.
SMEP is also offering Saccos other added on products and services including call and fixed account deposits for the highly liquid societies. “We also provide lines of credit on easy repayment terms and rates to Saccos that are experiencing short term liquidity shortfalls,” said Kamore.
Members of Saccos that partner with SMEP are able to access pay bill services, where they are able to make transactions directly to their Sacco accounts using the mobile phone.
“A Sacco member is able to buy goods from selected merchants and can make payments through the till as well as deposit cash directly to their SMEP accounts. We are also roping in Saccos to act as third party agents for SMEP and have already appointed several societies to act on our behalf,” said Kamore.
He added that while Saccos have in the past been hit by poor corporate governance issues, the industry is today better managed with the entry of the Sacco Societies Regulatory Authority (SASRA).
“Many Saccos are now using MFIs like us to better serve their members. We are also more confident doing business with them due to the regulatory regime they are operating under,” said Kamore.
SMEP is offering competitive rates to Saccos that are interested in opening fixed deposit accounts or savings accounts for payment of Sacco dividends as well as providing check off services to members of Saccos that do not possess any collateral when taking up a loan product.
While Saccos are increasingly getting into the more sophisticated areas such as asset finance, the reality is that most of these societies lack the necessary expertise to undertake some of the projects under this portfolio as well as the financial muscle to deal with the huge cash flows required for these projects.
“We deal with those Saccos that are interested in asset financing but lack the required cash. All the societies have to do is prequalify those members seeking financial support for us and then we facilitate the acquisition of the required asset which can be a vehicle, piece of land, posho mill and so on,” said Kamore.
“Once we advance cash for acquisition of the said asset, it is the Sacco that will assist us in the recovery of the loan. We sign a memorandum of understanding with the Sacco so that this recovery arrangement is put into motion. Just like commercial banks, we supply liquidity to individual Sacco members and a repayment plan is undertaken by the same society on behalf of the member,” said Winfred Kinoti – Head of SME and Institutional Banking at SMEP.
SMEP noted that it is undergoing a business re-engineering process that will see the institution sharpen its relationships with Saccos, churches, private institutions and corporate organizations.
It has already appointed Winfred Kinoti, an experienced banker, to head its SME and Institutional Banking business. This is to be followed by recruitment of a relationship manager and officers who will be dealing specifically with Saccos.