REPORT OF THE NATIONAL CHAIRPERSON TO THE JAMII SACCO VIRTUAL ANNUAL GENERAL

MEETING HELD AT JAMII SACCO CONFERENCE HALL ON 10TH DECEMBER, 2020 AT 10.00 A.M.

Preamble

The Chief Guest, Members of the Board/SC, Delegates,

County Director of Co-operatives, Nairobi County,
Sub-County Co-operative Officers present,
Ladies and Gentlemen

I am delighted to welcome all of you to the Jamii SACCO AGM for year, 2019. This is an annual
event where the leaders receive and share reports from the Board and Supervisory Committee
on the SACCO’S performance during the year under review. I note with gratitude the presence
of our Delegates from all the counties for this Virtual meeting, the first ever of its kind. This is a
show of good leadership and commitment to the SACCO affairs. To our Chief Guest, most
welcome to our AGM. Your presence is very much appreciated as we await to receive words of
wisdom and encouragement from you.

As you all are aware, the SACCO normally holds its AGMs in April of every year. However, due
to the outbreak of COVID-19 Pandemic and its effects, it was not practically possible to hold any
meeting as was scheduled. We complied with the Government of Kenya protocols to stay at
home, semi-lock down and observe hygiene among other advisory issues. We however, thank
God that the virus has been contained hence our holding this important meeting via Zoom.
During the lock down period, partially between March to June, 2020, the SACCO operated with
alternating staff in order to comply with the Ministry of Health guidelines. This has been the
most challenging period in the history of our operations.

I am however happy to report that all our staff and BOD/SC are safe and we trust that the
members country-wide are observing the same Government guidelines so as to stay safe from
the COVID-19 Pandemic.

Dear delegates, I note and commend the role you continue to play in delivery of services and
co-ordinating the Sacco activities at your respective stations. I am aware of the difficult
conditions we are going through as Kenyans and indeed members of our SACCO brought about
by the effects of this virus.

I wish to assure you of our support to enable you effectively serve all the members at the grass-
root level notwithstanding the same challenges.

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REVIEW OF ECONOMY

According to the Economic review report of 2020, the GDP growth rate in the first three
quarters of the year averaged 5.5%, slightly lower than market expectation. However, the
growth in the 4th quarter decelerated to 5.1%.

The overall inflation rate was at 5.82% and expected to remain within the Central Bank of
Kenya target range of 2.5% - 7.5% due to expected reduced food prices as a result of favourable
weather conditions. This outlook was further backed by the CBK Monetary Policy Committee
decision to lower the CBK rate to 7.25%.

The Kenya Shilling strengthened by 0.5% against the USD in 2019. This was supported by strong
forex reserves and increased Diaspora remittances during the year. The position now however
is different and on a declining trend. The upward pressure on interest rates was at 9.82% at the
close of the year. The performance of the Equity market was slow and lower than the previous
year due to slowing local and global economy expectation at the equities market to post more
modest returns in the medium term.

Corona Virus spread has generally led to value erosion across global equity markets, but this is
expected to stabilize once the pandemic subsides.

PERFORMANCE

Despite the state of the Kenyan Economy, the performance of the SACCO during the year under
review was positive as shown hereunder:

1. Revenue

The SACCO realized gross revenue of Kshs.580.7m compared to Kshs.532.6m in the year, 2018,
a growth of 9.02%. The major contributor to this growth was interest on loans and advances at
Kshs.524.2m compared to Kshs.489.7m in the year, 2018, an increase of 7.5%. This growth was
within the SACCO business plan and SMP 2016 - 2020 projections.

2. Share Capital

The Share Capital grew to Kshs.172.6m up from Kshs.148.9m, a growth of 15.9%. This growth is
attributed to capitalization of un-claimed Dividends, update of existing and new members’
accounts to the Share Capital threshold then of Kshs.6,000/=. As you are aware, this AGM
reviewed the threshold to Kshs.10,000/= to be met by all members by 31st December, 2020. I
therefore take this opportunity to appeal to all the members with Share Capital below the new
threshold of Kshs.10,000/= to increase their contributions within the timeline. The benefits of

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capitalization include creation of a strong financial base in the Sacco and payment of Dividends
to members at favourable rate of return.

3. Deposits and Savings

During the year under review, the Deposits/Savings grew to Kshs.3.165b up from Kshs.2.796b in
the year, 2018, a growth of 13.18%. The FOSA Savings also rose to Kshs.420.1m up from
Kshs.346.3m in the year, 2018, an increase of 21.30%. This demonstrates a high level of
confidence and participation by the members in the SACCO, hence this growth.

I take this opportunity to encourage all our members to increase their individual monthly
deposits and FOSA savings so as to benefit from individual savings build up, qualify for higher
loans and enjoy good returns in form of interest and rebates.

4. Payment of Dividends and Interest Rebates

Following this performance, the Board recommends the payment of Dividends and Interest
Rebate at the rates of 12.5% and 11% respectively to registered members as at 31st December,
2019. It should be noted that Dividends are payable to members with minimum Share Capital
of Kshs.6,000/=. As I reported in the last AGM, any accounts below the threshold of
Kshs.6,000/=, the Sacco will capitalize any Dividends payable. Indeed, with authority granted
by the Commissioner for Co-operatives and/or Regulator, the payments had already been
effected. This meeting shall be requested to ratify.

5. Loans and Advances to Members

During the year under review, the SACCO adjudicated and disbursed loans to members totalling
to Kshs.1,991,289,811 compared to Kshs.1,792,388,710 in year, 2018, a growth of 11.16%. The
outstanding balance as at 31st December, 2019 was Kshs.3.580 billion up from Kshs.3.184 billion
in the year, 2018, posting a growth of 12.43%. I trust that the members (loanees) directed the
loans to the intended projects and are enjoying the returns from their investments.

For your information, the State Departments for Planning through the Regulator (SASRA),
requires all Deposit Taking Saccos to submit reports quarterly on all loans granted and
disbursed per sector. This requirement is effective from this year, 2020, and we wish to take
this opportunity to request all members who will apply for loans to state the purpose as
provided in the loan application form. This will make it convenient for the SACCO to classify all
loans per sector and submit to the Regulator for their further action. The SACCO loan form is
already reviewed to accommodate this requirement.

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MILESTONES AND PROGRAMME ACTIVITIES IN THE YEAR, 2019

a) Information Communication Technology

During the year under review, the SACCO sourced and acquired a new Integrated Management
Information System to enhance service delivery to members. The new system, Vanguard
Financials by M/s Centrino Technologies Ltd was implemented with effect from 18 th December,
2019 and rolled out on 28th February, 2020. The SACCO went through a vigorous procurement
process to achieve this status. Upon roll out and migration of data, the SACCO, as would be
anticipated of any new system, experienced some teething challenges, which together with the
vendor have eagerly been addressed. Any emerging issues similarly continue to be sorted out.
The system is web based and scalable, and was acquired and installed at a cost of Kshs.18.8
million. This incorporated capacity building (training) of users.

b) Education and Training to Members

During the year under review, the BoD/SC and management carried out Education and Training
to members in all the regions of Kenya. A total of 2,312 members which is about 10.27% of the
Sacco membership attended the seminars.

I trust that the Seminars were interactive and the members benefited from the trainings. We
also received members’ feedback which we have acted upon while others are continuously
being addressed. From the above numbers, the attendances is still low and wish to request you
delegates to enhance mobilization of members at your branches to attend such training
programmes in future.

My Board continues to implement education and training to members in order to create

awareness of the SACCO products and services and share suggestions and proposals from the
members for improvement. Going into the future, delegates who mobilize double time
members who attended the last meeting may be considered for special recognition and award
by the Board.

The Phase I training seminars to members for the year, 2020 was undertaken in February and
March, 2020 and covered Nyanza, Western, and Rift Valley regions. Other areas will be covered
next year subject to clearance of the spread of COVID-19 Pandemic. As is already clear, the
education and training remained interrupted as gatherings were limited.

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c) Jamii Sacco Group Funeral Scheme (JSGFS)

As I reported to you in the last AGM, 2019, the SACCO implemented the Jamii SACCO Group
Funeral Scheme (JSGFS). As at the end of year, 2019, a total of 60 members had registered to
join it, which is still a very low number for a SACCO with over 20,000 in membership, and for a
product which was demand driven.

As a reminder, the requirements for joining this scheme are as follows:

 Completion of a prescribed Group Funeral Cover Scheme form and payment of an
annual premium of Kshs.2, 040/=. The same is payable once on joining the scheme.
Those who join mid-year, the amount is pro-rated to Kshs.170/= per month for the
remaining month to year end.
 Attachment of copies of National ID/Cards of contributor, and beneficiaries.
 Copies of birth certificates for beneficiaries who are minors.

Beneficiaries
The beneficiaries to this scheme are up to ten (10) as follows:-
 Contributor (member)
 One Spouse
 Upto 4 children
 Biological Parents – 2 No.
 Parents In-Law-2 No.
For any extra spouse, admission is separate.

Benefits
 Death benefit of Kshs.50,000/= per death case.
 Covers up to maximum of three death cases in one year.
It should be noted that the cover lapses at the end of each year in December.

d) New Staff

During the year under review, the Sacco recruited and engaged four (4) members of staff.
The same staff were deployed to the following departments: Micro-Credit, Human
Resource, Audit, and Marketing. The new staff are providing support to the four
departments to deliver services to the members.

e) Leader’s WhatsApp Wall

As you are aware, the SACCO created a WhatsApp Wall, which brings together the delegates
and the Jamii Sacco management to share issues relating to the members, leaders and

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 general operations of the SACCO. As a Board, we appreciate your participation in the same
platform, so far that has enabled us brief you on what is happening and also given
opportunity to handle many specific member concerns. In the process some issues have
not been handled to your satisfaction and we promise to tackle them and improve all the
time. Similarly, some delegates have shared items not meant for the wall and also engaged
in discussions outside the growth of Jamii SACCO. Please kindly take note that a wall of this
nature requires rules, calls for respect and should be utilized for the purposes intended. For
this reason, I call upon all of us to uphold these virtues for the platform to serve us better,
and remember all opinions count as long as they are relevant and purposeful.

I take this opportunity therefore, to encourage those who are not active here to utilize the
platform so as to effectively serve the members at their branches. On the part of the Board
and management, the Chairperson, Chief Executive Officer and senior managers in the
SACCO are the authorized officers to advise the delegates and/or those requiring
clarifications.

f) Retirement of our Chief Executive Officer

Our long serving Chief Executive Officer attained the retirement age of 60 years as at
December, 2019. The Board of Directors however, retained him on a two (2) year contract
to benefit from his institutional memory and wide long experience so that he can assist the
Sacco to:
 Develop a new SMP 2021-2025
 Implementation of the Human Resource Manual
 The acquisition of new MIS-System.
 To work and implement the Succession Plan of CEO’s position and other senior
critical positions in the Sacco.
 Mentoring and coaching of Senior Managers to take up higher responsibilities.

g) Strategic Management Plan 2016-2020

The Board/SC and management carried out a review of the current SMP 2016-2020 for year,
2019. The key issues that were reviewed included the growth of new business,
membership, asset liability management, implementation of new ICT-System, delinquency
management, and customer care/customer service among others.

In terms of implementation, the Sacco registered growth in most areas in the year, 2019,
but there is still room for improvement. Indeed membership growth target remained
elusive and not achieved. As you are aware, the same Strategic Plan comes to an end at the

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 end of this year, 2020. As such, another plan to cover 2021 - 2025 is being developed. The
final product will be launched next year, January, 2021, as its preparation is in progress.
Some of the delegates and members through a questionnaire gave input to this process.

Challenges and Way Forward

1. Membership Growth

As I shared earlier in this report, the membership withdrawal from the Sacco is still high due to
the fact that many members in the Public Service continue to attain the mandatory retirement
age. A total 2,336 new members were recruited during the year, 2019 while 467 exited from
the SACCO. It should be noted that the high number of exiting cases has a negative impact in
regard to reduced liquidity, and decline in loan uptake. I once again appeal to all members and
delegates to refer new members to our SACCO.

2. COVID-19 Pandemic

As already mentioned the outbreak of COVID-19 Pandemic has disrupted business and affected
the way of living including service delivery to members. The Nations of the world, Kenya
included, are fighting an invisible enemy, which has caused a lot of sufferings and fatalities. It
has forced governments to order lock downs of various scales and impose curfews with
negative effects.

The impact of this COVID-19 Pandemic to our SACCO business include among others:

 Mass lay-offs and salary cuts by various employers especially private sector, NGO’s, and
Small and Micro Enterprises (SMEs).
 Non-remittances due to lay-offs and closure of businesses.
 Under-payments of remittances due to salary cuts.
 Reduction in business operations due to scale down of SACCO activities as at one point
the operated with alternating staff so as to comply with the requirements of the
Ministry of Health.
 Slow uptake of loans by members due to the challenge of obtaining guarantors/security.
 Temporary closure of critical Government offices including Land Registries and National
Transport and Safety Authority (NTSA) hence slowing down the processing of collaterals.
 Curtailing the level of interaction with members, potential members, and even among
ourselves due to the adherence to the Ministry of Health protocols.
 Provision of sanitizers, masks, and water points which come with unplanned experience
including keeping social distance.

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 However, we trust that a vaccine medicine will be found to mitigate this virus soon to
enable all of us resume our normal activities. We have in the meantime adopted a new
NORMAL in order to remain a float and survive the impact of this disease.

3. Delayed Remittances

As I reported in the last AGM, a few employers and individual members continue to delay in
making their remittances to the SACCO resulting to loan delinquency. The SACCO continues
to engage the employers to release the deductions timely. The SACCO also continues to
advice the affected members to channel their monthly salaries through the Sacco FOSA, so
that their accounts can be promptly updated, not to fall into arrears. We note positive
responses by the same members and employees in this regard.

The above notwithstanding, the SACCO uses the Credit Control team to pursue defaulting
institutions and members. Other cases have been referred to Debt Collectors and
Auctioneers for follow up. A lot more however, still requires to be done in this area. Please
note that we also list defaulting members with Credit Reference Bureau (CRB) in line with
the law.

As for co-operate institutions, the Commissioner for Co-operative Development is providing

us the necessary support in the collection efforts of the remittance in arrears.

4. Board and Supervisory Committee

During the year under review, the Board and Supervisory Committee and Management
worked tirelessly together to implement various activities including members education and
training, the SMP-2018- 2020 and implementation of the new IMIS- System among other
programmes. The results for the year, 2019 that you have just received is due to the team
spirit that has seen growth in most areas.

As required in the SACCO By-laws, one third of the Board and Supervisory Committee are
supposed to retire by rotation. However, due to the effects of COVID-19, we consulted the
Regulator and the Commissioner for Co-operative Development, and we are guided that the
same be delayed to next year, 2021. As such, the leaders who were due to retire will serve
up to the next AGM. In line with this, the delegate’s election which was due in early 2020
also is delayed to next year, 2021. In exceptional cases, due to exits and/or new
branches/corporate such delegate elections may be recommended on a case by case basis.

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 Conclusion

In conclusion, I wish to sincerely acknowledge and appreciate the role played by all
delegates in supporting our members through dissemation and sharing of information at
the respective branches. We continue to enrol new members to join our SACCO even
though the numbers are few, and to improve in other operational areas even in the most
difficult times such as we are in.

I also wish to sincerely thank the Board and Supervisory Committee for their dedication,
commitment and support during the year under review that yielded positive results that I
have shared we have shared.

I also extend my appreciation to the Office of the Director of Co-operatives Nairobi County
for their invaluable support and guidance. My special appreciation to our two Co-operative
Officers Mr. Andrew Maosa who was in charge of our Sacco up to the 4 th quarter of the
year, 2019 and Mrs. Rosaline Mwithiga, DCO- Starehe, where we fall in the new County
administrative arrangements. The Officers you have occasionally sent to represent you in
our meetings and activities are also appreciated.

Finally, my appreciation to the Chief Executive Officer and his staff for the good services
rendered to all our members and stakeholders, and I ask them to continue doing the good
job.

Thank you and May God bless you all. Long live Jamii SACCO.

Anne L. Ambwere (Ms) MBS

National Chairperson – Jamii SACCO

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