Connect with us

Hi, what are you looking for?

Capital Business
Capital Business
KPLC MD

Kenya

Stima Sacco share drive oversubscribed

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.

Advertisement. Scroll to continue reading.

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.

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...