Despite heavy burden of the depressed economy, Stima sacco has recorded impressive revenue increment.
The high record is attributed to higher cost of insurance premiums coupled with higher provisioning for loans dragged Stima Sacco’s profitability as the giant Sacco surplus rose just 1pc to Ksh 4.2 billion last year.
Statistics from the sacco show it raised its loan loss provision from Ksh 800 million to Ksh 1 billion following the adoption of the International Financial Reporting Standard 9 (IFRS9) which had an impact on the revenue and profitability.
Stima Sacco says its loan book grew 12pc from Ksh 36.8 billion in 2021 to Ksh 41.3 billion in 2022 while total revenue rose from Ksh 6.8 billion to Ksh 7.4 billion over the same period.
“The challenge is that you have make those provisions even on performing loans because our loans grown, we had to make general provisions under IFRS9 just to cover incase of any dynamics,” said Dr John Mudany, Stima Sacco National Treasurer.
Revenue growth was driven by loan interest income which increased 24pc to Ksh 6.4 billion from Ksh 5.9 billion as well as total investment income which rose 57pc to Ksh 735 million from Ksh 591 million.
Additionally, Mudany said the growth momentum was also slowed down by the increase in premiums last year as the institution reported a Ksh 100 million increases in premiums paid to cover the loans issued to members.
During the year, Stima Sacco reported a 16pc asset growth, from Ksh 46.48 billion to Ksh 53.8 billion supported by a rise in membership which grew to 177,260 from 154,308 which is a 15pc increase.
“We see ourselves still on a growth trajectory. We will hold on to the key items we have put in our strategic plan which include growth of membership, products and services that are friendly to members and aggressive marketing,” added Rosemary Odhiambo, Stima Sacco Ag. Chairperson.
As a result of the improved performance, the sacco has proposed a dividend payout increase which if approved by members during the Annual General Meeting will rise from 14pc to 15pc while rebate will increase by 25 basis points from 10.75pc to 11pc.
This comes as the Sacco backs industry link to the National Payment System which will give the industry access to foreign exchange market, Electronic Funds Transfer (EFT), Real-Time Gross Settlement (RTGS) and bankers’ cheque.
“We do not have access to the National Payment System. For us that has been a rallying call as an industry for very many may years because as it is right now it means we need to partner with somebody else so that you are able to gain access to the NPS,” added Dr Hassan Gamaliel.
Stima Sacco currently has a core capital of Ksh 9.3 billion which is above statutory minimum requirement of Ksh 10 million.
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