Spending cuts lift Harambee Sacco out of losses

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Sacco paid dividends at 4% this year while interest on deposits at 5.5% this year.

By Jackson Okoth

A change in its executive suite, which saw the recruitment of a new Chief Executive Officer as well as Head of Finance, Investment and Strategy, combined with surgical spending cuts, is finally paying off for the giant Harambee Sacco Society Limited.

The Directors have recommended a payment of 4 per cent as dividend on share capital compared to the previous year when members of this Society went without any dividends. Interest on Members’ Deposits also increased to 5.5 per cent in 2018 compared to 4.5 per cent in 2017.

Dr George Onchiri CEO, Harambee Sacco

Considered the fourth largest Deposit-Taking Sacco in Kenya, in terms of balance sheet size, with Total Assets of Sh 26.3 billion, the giant Harambee Sacco has been on a stringent cost-cutting regime and has set its sights on customer focus, technology, staff empowerment, growth of non-funded revenue and disposal of idle assets, to set the Society back on a growth path.

Figures indicate that Harambee Sacco made a net surplus of Sh 141.9 million in 2018 compared to a loss of Sh 174 million the previous year.

The value of total loans and advances that the Society disbursed to members increased from 14.6 billion in 2017 to Sh 15.5 billion at the end of last year. Members’ Deposits and Savings increased from 17.6 billion in 2017 to Sh 18.8 billion in 2018.

Industry figures indicate that the 174 licensed DT Saccos have total deposits to the tune of Sh 342.3 billion as at the end of 2018.

Harambee Sacco board chairman Macloud Malonza (left)CAS Ministry of Industry ,Trade and Cooperatives Joshua Chepchieng during the Harambee Sacco’s 47th ADM.

“Of course the dregs of our past have continued to haunt Harambee Sacco as an institution but we are at the exorcism stage. This is the beginning of our rebirth as an institution-the rising of a phoenix from the dead,” said Dr. George Onchiri, CEO of Harambee Sacco Society Limited. He was appointed CEO of Harambee Sacco in November 2018 after leaving Safaricom Sacco Limited where he held the same position.

In order to lift out of loss territory, Harambee Sacco management made huge cuts in the Society’s expenses. On the list of some of the biggest reductions is Administrative Expenses which declined to Sh 659.9 million in 2018 from Sh 1.7 billion the previous year. In this category, Harambee Sacco huge cuts in its printing and stationary expenses from 18.7 million to Sh 5.2 million and Ushirika Day celebrations which declined from Sh 3.7 billion in 2017 to Sh 823 million in 2018.  Expenditure on postage, telephone and cable expenses also fell to Sh 10.5 million in 2018 from Sh 16.9 million the previous year.

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