Why Harambee Sacco plans to stop external borrowing

Harambee Sacco has embarked on a program that will help them do away with external borrowing.

This is in a bid to re-establish themselves as the number one Sacco in the country.

The CEO of the Sacco George Ochiri said the Sh4 billion Shares Drive campaign will see interested Sacco members invest in the equity of Harambee Sacco.

“This is not making deposits against which you take a loan. No. You commit an investment just like you’d invest in a matatu or a rental,” Ochiri said.

He spoke on Tuesday at a breakfast meeting with the 86 top savers from the Coast region, who have at least a million shillings in savings.

He said the shares drive will guarantee savers a 15 percent return for the next five years.

“We’ve done all the paperwork, including seeking approval and we are ready to start. We are launching it on the 27th of this month,” the CEO said.

Once in place, Sacco will have improved its liquidity, and compliance and will have done away with external borrowing.

The minimum shares for this program are 100,000 as opposed to the normal statutory minimum shares of 30,000. It is voluntary.

“We do mobilize for money which we commit to different investment vehicles like matatus or rentals. Now we are saying no, we don’t need to go to those.

“Come to Harambee, there is enough market for money at Harambee. We will invest it and generate enough income to share amongst ourselves,” Ochiri said.

“It turns out that with our credit loan book, we are in business. We can make money. So we need more money to lend out and with this, we want to do away with external borrowing,” the CEO said.

He said Harambe Sacco wants to comply and beat all the credential ratios and at the same time improve their liquidity and enable them to give longer-term loans, stretching over nine years, compared to the banks.

Ochiri called on their members from the Coast region to increase their savings in a bid to secure their future and that of their children.

The Sacco has 79,000 members across the country with about 30,000 coming from the Coast region.

The Millionaires Club from the Coast has about 150 members.

According to CEO  Ochiri, the Coast has many untapped opportunities for investment and the Sacco encourages their members from the region to save more to be able to borrow more and tap into those opportunities.

A section of the members told the Star they have eyes on the blue economy sector.

“With the new program that the Sacco wants to establish, we will have opportunities to do more and that is why I think the blue economy will be among the best investments I will make,” a member told the Star.

The Sacco has 79,000 members across the country, with about 2,400 having at least a million in savings.

Of these, at least 1,000 are in Nairobi, while the Coast region has at least 86 millionaire savers.

Ochiri said Harambee is a pioneer Sacco which wants to recapture its former glory.

“It is the duty of Harambee, all the time, even now, to show direction. So even an activity like this one, we will start it and then the other Saccos will follow,” Ochiri said.

The Sacco has assets worth about Sh2.5 billion across the country.

“We lost our glory a little, but we are very clear. We are reclaiming it in the next five years,” Ochiri said.

The CEO said their mortgage program, which started three years ago, has attracted generally youth from KDF and some parastatals.

“But uptake is not as high as we thought. I think it is a tedious process because we have to go through the standards set by Kenya Mortgage Refinancing Company. But we have indeed had members coming in and buying into acquiring houses through the mortgage facility that we have,” Ochiri said.

Elina Mdawida, one of the top savers from 1995, called on the youth to start saving early when their responsibilities are less.

“When you get employed, start saving immediately when you still have fewer responsibilities, because you are probably unmarried and still have no child,” Mdawida said.

She said though she is about to retire, she is well covered for her future.

“When saving in the Sacco, it is easier to get loans,” Mdawida said.