This archive report was first published on 13 July 2020.
On July 13, 2020, Metropolitan National Sacco Limited announced a strategic partnership with Cooperative Bank, marking a significant milestone in its restructuring process.
The 43-year-old Sacco, with over 100,000 members, had faced significant challenges in the past, including a major setback in 2018/2019 when loans advanced to members surpassed savings, leading to delays in processing salaries and loans.
Cooperative Bank intervened, providing Co-op Consultancy to build capacity for the Sacco's long-term sustainability and restructure its funding requirements to better manage members' monthly loan demands and overall liquidity flows.
Following the approval of the transformation strategy at the 2019 Annual General Meeting (AGM), the Sacco reported significant improvements, including a 6% increase in deposits to Sh7.32 billion, recovery of over Sh110 million in non-performing loans (NPLs), and the appointment of a new Chief Executive Officer (CEO), Benson Mwangi.
Under the new CEO's leadership, the Sacco has seen a rise in membership, with 167 new members recruited and 2070 membership reinstatements from the previous period.
The operational efficiency initiatives resulted in an overall cost reduction of Sh96 million, mainly driven by savings in financial and administrative expenses.
The Sacco has also implemented a cost reduction strategy, paying interest on deposits at the rate of 6.25% and retaining 50% of the interest rebate as deposits while paying out the rest in cash.
Dividends on shares have been paid at 6.25% compared to six percent in 2018.
The board has embarked on the second phase of the transformation strategy, leveraging technology to lead to more efficient service delivery.
