Youthful CEO turning around the fortunes of Kakamega's varsity Sacco

Wevarsity Sacco Chief Executive Rehema Atieno during an interview at the Sacco offices in Kakamega town. [Benjamin Sakwa, Standard]

In the heart of Kakamega County, nestled among the rolling hills, Wevarsity Sacco Society Ltd was once a beacon of financial stability and community support.

However, years of shambolic leadership and financial mismanagement left it teetering on the brink of collapse, its members disillusioned and its future uncertain.

But five years ago, a few of the Sacco’s members took matters into their own hands to prevent their beloved institution from fading into obscurity.

Among them was Rehema Atieno, a seasoned accountant who had witnessed firsthand the devastation wrought on members by poor financial stewardship, having risen from just an intern to assistant credit officer and then to the role of the Chief Executive of the Sacco at the age of 26 years.

Determined to steady the ship, she rallied a group of like-minded new board members, who shared her vision of restoring Wevarsity Sacco to its former glory. “The board of management and I started initiatives to turn around the fortunes of the Sacco,” Ms Atieno said.

“We  first ensured the staff and the board of directors enjoyed a cordial working relationship, which, in turn, enhanced service delivery to our customers.” Wevarsity Sacco’s transformation journey was not without its challenges. The Sacco’s finances were in disarray, with debts piling up and assets on the decline.

Moreover, the trust of the members had been eroded, with many of them withdrawing their contributions.

But Ms Atieno says with the help of the board of directors, she embarked on dealing with the issue of liquidity, which she notes is still a work in progress.

Together, they got to work on implementing an overhaul of the Sacco’s financial system aimed at restoring stability and accountability.

They combed through the Sacco’s records with a fine-tooth comb, identifying areas of waste and inefficiency, and implementing strict budgetary controls to prevent further loss of funds.

“We started internal resource mobilisation by encouraging members to save more to increase share capital and avoid external borrowing. We introduced austerity measures where money was only spent on budgeted projects and today, there’s prudent management of members’ savings,” said Atieno.

Recovery department

She added: “Many loans were in default, which resulted in liquidity issues, but after creating the marketing and recovery department, we ensured all loans were repaid as per the Sacco Societies Regulatory Authority regulations.”

The management also started ploughing back dividends, retaining 50 per cent of earnings and depositing it in members’ accounts as shares, which significantly helped increase liquidity and, in turn, ensured loans were available to members whenever requested.

The team also embarked on a concerted campaign to rebuild trust within the university staff membership. Slowly but surely, their efforts began to bear fruit. Former members began to return, drawn by the promise of a brighter future and the new changes. With each new sign-up, the Sacco’s coffers swelled, providing much-needed resources for the turnaround efforts.

“Wevarsity Sacco has experienced exponential growth in its total assets, loan portfolio and return on investment (revenue), with a current total asset base of Sh460 million and  Sh79 million in total revenue, representing 17 per cent as return on investment,” said Ms Atieno.

She said the introduction of new products and services like the 72-month Mega loan where one can borrow up to Sh10 million; My January Akiba savings, a 52-week savings challenge and Agency Banking (Co-op Jirani) has helped stabilise the operations of the Sacco.

The CEO said the Sacco also opened up its membership to other professionals outside the university fraternity, including those in formal and informal employment by developing tailor-made products for them, which she notes has gone a long way in solving the liquidity issues at the Sacco.

“We have introduced Wevarsity Sacco FSM (Financial Support Management) to support members in business and commercial agriculture.  Most businesses fail due to a lack of financing, marketing and technical know-how, financial planning, record-keeping and strategy. This enhances the creation of more entrepreneurs and encourages self-employment,” said Atieno.

Last month as the Sacco celebrated its 20th anniversary,  for the first time, the board of directors recommended payment of 9.5 per cent on weighted share capital and another 8.2 per cent on weighted members deposits, translating into a total dividend payout of Sh28.235 million.

Internal controls

Evans Nandasaba, the Sacco’s treasurer, attributed the remarkable transformation to resilience and focus on the Sacco’s core business of lending and saving.  “Improved internal controls and risk management has ensured no Sacco funds are lost either through fraud or mismanagement for the last three years,” said Nandasaba, adding ‘prudent credit management has seen loan default at 4.72 per cent, which is below the SASRA recommended maximum of 5 per cent we are therefore compliant’

“The Sacco leadership has also ensured all the members who go out of formal employment either through retirement (senior citizens) or resignation continue to patronise our Sacco products and services.” Chrisantus Nakitare, the board chairman, told the Enterprise the management has worked hard to ensure it is no longer burdened by the mistakes of the past.

“The Sacco has risen from the ashes of mismanagement to become a shining example of what can be achieved when people of goodwill come together in pursuit of a common goal,” Mr Nakitare said.

“Our mission as the board of directors is to spearhead equity, diversity and inclusion. We want to grow our members from 1,500 to over 3,000 members in the next year.”  The Sacco draws its membership mainly from Masinde Muliro University staff, Kibabii University, Turkana University, Friends Kaimosi University, Access Kenya and the County Government of Kakamega among others.