NAIROBI, Kenya, Oct 12 – Stima Sacco has announced that its recently closed share drive was 42.6 percent oversubscribed having netted Sh713 million from its members who are largely drawn from the electric energy and allied sector.
Chairman Eng Joseph Njoroge said on Wednesday that the success of the private placement exercise where they targeted to raise Sh500 million will translate to faster and expeditious approval of members’ loans.
“The total number of shares that were applied for were 7,132,376 while the number of applicants were 6,845 out of the total membership of 11,412 and therefore we have registered a very impressive (member) subscription of 60 percent,” Njoroge said proudly.
Five million shares with a value par of Sh100 were on sale with the minimum amount of shares that a member could purchase put at 200.
The drive was launched on July 11 with the intention of raising cash to finance the near 12,000-member sacco’s growth and also enable it to meet its capital threshold levels in accordance with the Sacco Societies Act (2008).
Having raked in an additional Sh213 million at a time when the economic conditions were not favourable, the chairman said this pointed to Kenyans’ ability to mobilise resources locally for investments.
“We made a decision of making use of the opportunity that we had and mobilise resources from our members. This also means that as a country, we do not have to look outside for resources; we can generate them here,” he remarked.
With the proceeds, Njoroge, who’s also the Chief Executive Officer of Kenya Power, said Stima Sacco would be able to comfortably lend to its members and at affordable rates.
Most Savings and Credit Co-operatives lend at a rate of one percent per month, which translates to 12 percent per year, a figure that the sector terms as ‘conservative’ when compared to what is offered by commercial banks.
And coming at a time when the interest rates are bound to rise significantly following the move to increase the base rate by four percent to 11 percent, Njoroge underscored their commitment to maintain their charges.
This he said is and has always been their competitive advantage and added that Stima Sacco has no intention of revising it upwards in line with the market conditions.
And following this success, all applicants will get their full allocation while the sacco will now be able to reduce its reliance on external borrowing from where they finance nine percent of their loans and advances.
The sacco’s CEO Paul Wambua disclosed that their goal was to have the (nine percent) rate of their loan portfolio currently at Sh6.2 billion, halved by 2014.
Also high up on their agenda is to double its asset base from the current Sh6.2 billion to Sh12 billion, an objective that was commended by Cooperatives Minister Joseph Nyagah as one having the potential to contribute to the growth of the cooperative movement.
The government, he pledged, would continue to play its facilitative role and ensure reforms that support a well regulated movement.
Doing so, Nyagah said would have a profound impact on the sub-sector which boasts of Sh180billion in national savings and Sh200 billion in asset base.