the same time be able to collect and receive the monthly check off remittances

The same time be able to collect and receive the

This preview shows page 90 - 93 out of 148 pages.

the same time be able to collect and receive the monthly check-off remittances from each of the
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The SACCO Supervision Annual Report, 2017 Page | 90 counties. The threat of losing such members to localized DT-SACCOs and the urge to form County- owned SACCOs by government employees whose services have been devolved remain real. Strengthening the national legal framework compelling the prompt remittances of all cooperative deductions, including deductions by County governments is thus a top priority for the success of DT-SACCOs in the medium to long term. 8.5. DEPOSITS MOBILIZATION For DT-SACCOs to remain comparatively competitive as alternative financial service providers, they must have the ability to mobilize and retain deposits from their members on a much higher ratio than the demand for credit from members. This will enable them fund their assets, particularly the loan assets from internally generated funds rather than from external borrowing which are usually very expensive and subject to interest rates fluctuations. For the second year running the aggregate loans to deposits ratio has remained above 108%. This is not sustainable in the long term and generally implies that DT-SACCOs have not only lent out their entire deposit portfolio, but also that there is very little or no room within the system to allow for key alternative investments in government securities, which are important for liquidity management, participation in the national payment system as well as opening up the inter-SACCO lending platform. DT-SACCOs must therefore devise innovative ways and means to not only attract, but to equally retain deposits (savings) from members by putting in place measures to attain the core functions of successful deposit mobilization namely efficient accessibility of all financial services; and assurance of the safety of member funds that spur investor (public) confidence to save with the SACCOs among others. 8.6. USAGE OF INFORMATION COMMUNICATION TECHNOLOGY The use of ICT to recruit members, and also provide basic financial services to the members particularly through online or internet; SACCO agencies or mobile technology has the potential of improving accessibility and convenience which in the current digital financial services age; are critical success and sustainability factors. Core deposit-taking services including application for memberships, opening of accounts, application for and approval of loans, loan repayments, deposits and withdrawals, transfer funds, payment of bills and account’s statements, must therefore at the minimum be available online and through the mobile platforms, if SACCOs are to continue offering competitive financial services in a sustainable manner. The proliferation of many digital financial credit providers particularly with regard to the provision of unsecured micro-loans through the internet or mobile enabled platforms means that the
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The SACCO Supervision Annual Report, 2017 Page | 91
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