Sacco to raise asset base to Sh34b in six months in turnaround strategy
Steve Umidha @UmidhaSteve
Harambee Sacco is anticipating growth in both revenue and profitability, on the back of last year’s impressive performance and strong government support, despite the uncertainties surrounding the coronavirus pandemic.
Speaking exclusively to Business Hub, the Sacco’s CEO George Ochiri said the company targets to raise its asset base to 34 billion by end of the year from Sh 29.5 billion it reported in 2019.
“The impact has been very minimal because we mainly service civil servants who were not impacted by pay cuts and layoffs as a result of the pandemic…we hope to grow the society by 15 per cent this year, so we are sure of having a balance sheet of about Sh34 billion by end of 2020,” said Ochiri.
During that period, Harambee Sacco’s net profits grew by 85.7 per cent to Sh100 million in 2019 from Sh53.8 million recorded in the previous year – with assets worth Sh26.3billion as of 2018.
Member’s deposits and savings grew to Sh20.1 billion in 2019, however the Sacco experienced a high rate of withdrawals forcing it to pay out Sh1.34billion to 5455 members.
To boost that growth, the Sacco has earmarked some of its prime properties for sale – with a huge chunk of its multi-billion-shilling real estate property valued in excess of Sh3 billion to be disposed of to increase its cash flow and boost its turnaround plan.
In Kisumu for instance, the sacco is targeting 11 acres for sale to fetch Sh200 million while in Mombasa it is targeting to sell 16 maisonettes at Sh25 million each to raise about Sh400 million.
“This year we were to initiate disposal of some of our prime property like in Nyali but right now the property market is not at its best, but when the economy recovers those plans will kick off.
But Harambee is rich, richer than what is estimated in the books,” said Ochiri.
Harambee Sacco is currently ranked fourth largest deposit-taking institution behind Kenya Police Sacco, Mwalimu and Stima Investment Sacco.
Ochiri expects an exponential growth owing to the strategies the company has employed since he assumed the CEO post, having earlier served in a similar position at Safaricom Sacco.
“We have seen some of the policies such as tightening financial control flows, deepening IT systems we are putting in place bearing fruits,” he said, adding that, “We have also had to bring on board data analysts to help with the financial leakage.”
Last year saw the company suspend about 16 of its top officials in various departments that had been found culpable of mismanagement and outright fraud.