Harambee Sacco ups bid to raise Sh4b from share capital

Business
By Esther Dianah | Mar 29, 2024
Co-operatives and Micro Small and Medium Enterprises Development CS Simon Chelugui (centre) with Harambee Sacco National Chairman Macloud Malonza (right) and CEO George Ochiri (left) addressing the media during the launch of the 4 billion shares drive in Nairobi.[Boniface Okendo, Standard]

Harambee Sacco has launched an aggressive membership share drive to strengthen core capital and increase deposits.

 The sacco aims to raise Sh4 billion. “Our Share capital stands at Sh2.4 billion. For us to be compliant, we need a minimum of Sh4 billion,” said Harambee Sacco Chief Executive George Ochiri.

 Speaking during the sacco’s annual general meeting in Nairobi, Ochiri noted that last year, the society incurred interest on external borrowing to the tune of Sh445 million and an additional Sh76 million on the overdraft, the money that would have been paid out to sacco members as dividends.

 “Our business is challenging and cannot borrow from banks, and therefore Sacco members need to finance the Sacco from within,” Ochiri said.

 Speaking in the inaugural shares drive launch, Cabinet Secretary for Co-operatives and Micro Small and Medium Enterprises Simon Chelugui lauded the sacco’s move to guarantee a 15 per cent interest to its members, saying it is a good investment. “I overemphasize the importance of saving, particularly in the current economic times. Savings culture among members promotes social security,” Chelugui said.

 The CS urged the sacco leadership to focus on service delivery, innovation, technology strategies and automation to remain strong, noting that his ministry is carrying out legal.

 Regulatory and legislative reforms, “the corporative Bill has passed through cabinet is now with the house.”

 With about 369 regulated sacco’s and over 1000 unregulated saccos, Chelugui has said many saccos collapse due to lack of oversight.

 Ochiri revealed that members who invest in the equity will this year earn 15 per cent interest or Sh15 per share. This is what Harambee Sacco board has committed to pay its investors for five years if the Sh4 billion drive is successful.

  Harambee Sacco Chairman Macloud Malonza said the shares drive is a way of empowering its customers. The chief executive noted that in the previous year, they owed Sh3 billion to various lenders, with interest rates as high as 18 per cent, rendering the debt unsustainable.

 

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