www.braemegsacco.co.ke AGM 2021 BOOKLET +254 724 053 548 [email protected]
Sokoni Arcade, 2nd Floor.Along Gitanga Road,Kawangware.
Table of Contents
1. AGM 2021 NOTICE ...... 3 2. AGM 2019 MINUTES ...... 4 3. CHAIRMAN’S REPORT ...... 14 3.1 Introduction...... 14 3.2 Global & National Economic Outlook...... 14 3.2.1 Society Asset Base...... 14 3.2.2 Membership...... 14 3.2.3 Deposits & High savers...... 15 3.2.4 Strategic Plan 2019-2023...... 15 3.2.5 Information & Technology...... 15 3.2.6 Staff Matters...... 15 3.2.7 SACCO Societies Regulatory Authority [SASRA]...... 16 3.2.8 Corporate Social Responsibility [CSR]...... 16 3.2.9 Promoters and Partners...... 16 3.2.10 Elections...... 16 3.2.11 Conclusion...... 16 3.3 Resolutions ...... 17 3.3.1 Resolutions (2020) ...... 17 3.3.2 Resolutions (2021) ...... 17 4. CREDIT COMMITTEE’S REPORT ...... 18 4.1 Introduction...... 18 4.2 Share capital...... 18 4.3 Loans Disbursement...... 18 4.4 Loan Turnaround Times...... 18 4.5 Delinquency Management...... 18 4.6 Conclusion ...... 19 5. EDUCATION COMMITTEE’S REPORT ...... 20 5.1 Introduction...... 20 5.2 New Implementations & Reviews...... 20 5.2.1 Education Loan...... 20 5.2.2 Telegram Platform...... 20 5.2.3 Website...... 20 5.2.4 Interest on Saving Products...... 20 5.2.5 Last Respect (Benevolent Fund)...... 21 5.3 Training & Workshops...... 21
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5.4 Trips...... 21 5.5 Appeal to Members...... 22 5.6 Conclusion ...... 23 6. TREASURER’S REPORT ...... 24 6.1 Introduction ...... 24 6.2 Liquidity...... 24 6.3 Need for Enhanced Risk Management measures ...... 24 6.4 2021 moving forward ...... 25 6.5 External Borrowing...... 25 The Interest on Deposits Rate ...... 25
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1. AGM 2021 NOTICE
To all members,
Braemeg SACCO,
REF: BRAEMEG ANNUAL VIRTUAL GENERAL MEETING (AGM) NOTICE.
Braemeg SACCO wishes to inform you of the Annual General Virtual Meeting to be held on Saturday, 3rd April 2021 on a zoom application from 1:00pm. The meeting will conduct the following business:
● Notice: To read the notice to convene the meeting.
● Minutes Confirmation: Confirm the minutes of the last AGM meeting held on 23rd March 2019. ● Chairman’s report.
● Braemeg Committee’s Reports.
● Auditors report: To receive, evaluate and if approved, adopt the audited accounts for the year ended 31stDecember 2020. ● Treasurer’s report.
● Resolutions.
● Elections.
Names Reason Campus
Alex Njoroge (MC) Term expired BRSD Grace Karunyu (MC) Term expired BGR Handey Mose (MC) Term expired BGE
Daniel Musyoka (SC) Term expired BRSD
Philemon Manga (SC) Stepping Down BGR
● A. O. B
Kindly; Ensure high internet connectivity.
The meeting link shall be communicated in the course of time.
Yours Faithfully,
James L. Anyika,
Hon.Secretary, Braemeg SACCO.
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2. AGM 2019 MINUTES
Members Present As per the sheet attached. Chairman- Rowland Njagi Vice Chairman- Josephat Okora Secretary- James Anyika Treasurer- Joseph Thuo Credit Chairman- Alex Njoroge Credit Secretary- Grace Karunyu Officials Present Credit Member – Nicholas Sabasi Education Secretary – Handey Mose Education Member- Jacqueline Murotsi Supervisory Chair- Daniel Musyoka Supervisory Secretary- Philemon Manga Supervisory Member-Sylvia Wangechi Mr. Njoroge Mwangi – Ministry Representative In Attendance Mr. Josphat Muigai-KUSCCO Mr. Mwai-Ministry Auditor 1. Reading and confirmation of Previous AGM minutes. 2. Chairman’s report. 3. Credit committee’s report. 4. Supervisory committee’s report. Agenda Items 5. Auditor’s report. 6. Treasurer’s report. 7. KUSCCO 8. Ministry of industrialization and Cooperatives. 9. A.O.B Opening Prayer Jane Wanjiku Notes: The chairman welcomed the members to the AGM, he went ahead and conducted the National Anthem. Thereafter he gave a word of thanks to cooperative bank representatives and appreciated their support towards the AGM event. Mr. Chairman introduced his team of management committee, he ushered in the Chair supervisory and the SACCO manager who introduced their teams too. He invited the Hon. Secretary who read the notice to convene the meeting.
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Agenda Topic #1 : READING AND CONFIRMATION OF THE PREVIOUS AGM MINUTES
The secretary read through the minutes of the AGM meeting held on the 23rd of March 2019. The minutes were proposed by Janet Kirumba seconded by Theophilus Vaati as a true record of what transpired in the previous AGM. Matters arising On the set Dubai trip dates, Josephine Omachi wanted to know if school closing dates for all other campuses were factored in the dates that were settled on for convenience purposes of the registered members? In response, she was told that a big majority of Braemeg SACCO members are from Braeburn schools and so most of SACCO functions are always planned in accordance with the school calendar. Agenda Topic #2: CHAIRMAN’S REPORT
The chairman read through his report and the following were the highlights: I. Macro-economic performance:
The Chairman reported the overall inflation rate at 6% as at December 2018. Kenyan economic outlook improved in 2018, the GDP grew at an estimated 5.9% from 4.9% in December 2017. This was brought about by eased political uncertainty, improved business confidence and strong private consumption. II. Braemeg SACCO Asset base:
He reported the growth of Braemeg SACCO Asset base to slightly over 0.3Billion mark in 2018 closing at KES. 334,210,983 in December 2018 from KES. 288,106,099 in December 2017 an increase of 16%. He informed members that Braemeg SACCO continues to grow in terms of membership whereby in the year 2018, new 82 members were registered in the society. He said that witnessing old members who withdrew from the society in the previous years rejoining again is a good gesture that signifies renewed confidence in the society. III. Deposits:
He stated that Braemeg SACCO member’s deposits have recorded a tremendous growth pattern, growing by 16.03% in December 2018 that is KES. 280,253,051 from KES. 241,521,056 in December 2017. In the year under review our monthly highest saver deposited KES. 100,000 every month. He recognized the highest saver whose deposits stood at KES. 4,008,206, with nil loan balance. He reported that the management increased emergency loans to KES. 100,000 up from KES. 75,000 and thanked all the members who have increased their uptake in SACCO Products Once again. IV. Turnover & profitability:
He informed members on the society’s revenues which improved significantly from KES. 38,454,162 in December 2017 to KES. 41,339,791 in December 2018 an increase of 7.50%. This is was being compelled by the increased uptake of normal & development loans emanating from improved liquidity. Additionally;
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diversification of investments for instance, doing savings on call accounts, fixed deposits and financial assets with KUSCCO Ltd. The chairman officially launched Braemeg SACCO 2019-2023 strategic plan demonstrating that the document lays down a clear road map, objectives, strategies and action plans that the management will follow to take Braemeg SACCO to the next level. On Social corporate responsibility; Mr. Chairman gave details on how the activity was successfully conducted by the committee and members, he thanked the shareholders for their generosity in helping the needy and being part of the noble act. In conclusion he sincerely thanked members for attending AGM meeting again he thanked the Ministry of industrialization and enterprise development officials for the guidance that propelled the SACCO that far. Furthermore, he welcomed ideas & opinions that will go a long way in improving the SACCO. V. Resolutions:
The chairman proposed the following resolutions to members for approval: • To retain the borrowing power at 30 million Kenya shillings for the financial year 2019. • To retain ministry of industrialization as auditors for the financial year 2019. • To raise normal loans ceiling from the current 2M to 3M Kenya Shillings. • To approve an honorarium to the current management of KES. 600,000. • To approve dividends payments to members at a rate to be declared in the financials. • Approve that 10% of each member dividends be retained as member contributions.
• To approve an increment of monthly contributions from the current KES. 1,500 to KES. 2,000.
The chairman’s report was proposed by George Kadondi and seconded by Jane Njari.
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Agenda Topic #3: CREDIT COMMITTEE’S REPORT
The chairman of the credit committee read through his report. The following were the highlights of his report I. He commenced by acknowledging the support given out to him from his team in the credit committee and the SACCO office staff, applauding their dedication and commitment in matters credit. II. He pointed out that the main focus of the Committee is to ensure that members repay their loans in accordance with their agreements in order to safeguard SACCO funds. III. Strict controls on loan refinancing were adhered to compare to previous years which yielded positive results in mitigating liquidity challenges. IV. Urged members to ensure that while guaranteeing loans, they should not exceed their shareholding in the SACCO. He explained to members how decision is reached at when a member makes a loan request; whereby an overall assessment of member’s loan is done against the ability to repay the loan in order to strike a balance between the society and members interests. V. The credit chairman alluded to the fact that; regular staff training and review of lending policies and procedures ensures that fair and prudent lending decisions are being made. VI. He promised to help members resolve any financial difficulties they might be experiencing. In conclusion the credit chairman thanked the committee members and the office staff for going beyond an extra mile while executing SACCO activities. Agenda Topic #4: SUPERVISORY COMMITTEE’S REPORT
The chairman of the supervisory committee read through the supervisory committee’s report and the following were the highlights: I. Firstly, the supervisory chairman appreciated members for according them the mandate to serve in the supervisory committee and thanked SACCO members’ commitment as well. II. He also acknowledged the efforts from both the management committee and the SACCO staff in SACCO activities. III. On SACCO busses; he reported that the buses were sold during the year in review as per the resolution passed by the members in the previous Annual General Meeting 2017. The buses were sold at a cost of KES. 3,530,000/- broken down as follows; KCG 541M KES. 1,630,000 KCG 540M KES. 1,900,000 IV. He elaborated the role of the SC in their report. Several success factors from the management committee were outlined as below; a) Increase in loan disbursement which was an indication of growth b) Dividends for the year 2018 were timely disbursed and with minimum cases of disparities. c) On corporate social responsibility; it was reported to be a noble process with a lot of openness. However, they recommended the MC to come up with a policy that will guide
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members on Corporate Social Responsibility and which clearly defines to members the importance of giving back to the community. d) Members were encouraged to be attending education days and training whenever called upon so as to acquire the knowledge necessary for personal development. V. He recommended for an election Policy to be established stipulating procedure and requirements of any member being elected to the Board. VI. He stated the need for establishment of a fully-fledged SACCO Secretariat to run the operations of the SACCO under the Oversight of the Board. The supervisory committee’s report was proposed by Francis Kioko seconded by Joseph Kioko.
Reactions and questions to the SC Report I. On the SCR variations on expenses; asked by Stephen Mwogera ; He wanted to know the justification of extra amounts that were appearing on the expenses; in response He was informed of the receipts that were submitted late to the office and the supervisory committee when reconciliation had already been done. He was assured of timely submissions in future. II. Naomi Njeri wanted to know why the valuation report read 3.3 m and yet the bus was sold at 1.5m In response Mr. chairman informed members about the efforts that were put in place by the MC after the mandate that was given to them by members in an AGM to sell the buses. Potential buyers came in too late with offers that were way below therefore with accumulating sales yard charges and value depreciation, the buses were sold in the following manner; Dozen KCD 021Z was sold at 1, 500, 0000, Scratch KCG540M was sold at KES.1, 900,000 and all the after sales monies were used to settle the Faulu bank loan that was founded by acquiring the buses. In regards to former officials’ bus, the MC did apportionments of the loan to the individual concerned members therefore the SACCO money is on an on-going recovery. III. On clarification about disposal of buses; asked by Erick Munene The chairman explained that the bus was co-owned between Faulu bank and Braemeg SACCO therefore disposing the buses was an uphill task. The buses were later on sold by Car Max Ltd at 2m for the 1st one and 1.5m for the second one with commission for the yard owners of KES. 100,000 for every bus. Mr. chairman explained the frustration that was brought about by the Faulu bank for the release and transfer of the log books. IV. On sale agreement documents and the bus logbooks; A concern raised by James Kanene Mr. Chairman told the SACCO manager to run copies of all the bus concerned documentations and avail them to any SACCO members who wishes to have in order to ensure total transparency.
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Agenda Topic #5 AUDITORS REPORT
The report was presented by the auditor Mr. Mwaura, he went straight to the financials. The following questions were raised with regards to the auditor’s report. I. Simon Kithuka wanted some clarification on the Christmas package interest and how the 3% was settled on. The response form management committee was that; initially all members irrespective whether subscribed or unsubscribed to that package used to get returns through accrued interest on investment via declared dividend. However, it was realized and clearly separated and so the 3% came in due to progressive savings that trickles down the course of the year, which in return motivated the package holders. II. He questioned why the withholding tax ought to be applied on dividends to be paid to members; III. The auditor alluded to the formulae that is used in the government taxation policy, additionally he clarified that interest that the SACCO generates not only comes from member savings but rather several sources, e.g. KUSCCO, dividends from Cooperative bank, fixed and call deposits interest etc. therefore the need for taxation comes in. IV. He wanted to know why a member who does refinancing has to pay for a new insurance fee for the loan; In response, it was made clear that a new loan has got a new shelf life and as a matter of policy that is a practice that has been in existence. The ministry official Mr. Njoroge asked for the adoption of the report and the report was proposed by Thomas Okech and seconded by Benedict Nzioka. Agenda Topic #6: TREASURER’S REPORT
The treasurer read through his report and highlighted the following: I. Improved liquidity which was as a result of effective planning and management of members’ funds by strictly engaging in the core business of the SACCO. II. Better payroll administration, enhanced methods of debt collections and management. III. Appropriate loan policies coupled with new dividend policy that has seen members increase their monthly savings and limited membership withdrawals. IV. Opening of the common bond to allow membership from other international schools that worked to Braemeg SACCO’s advantage. He thanked new members who joined from other international schools for choosing Braemeg SACCO as its preferred financial partner. He encouraged all members to increase their patronage of SACCO products and services so that all reported efforts are improved and sustained V. The treasurer reported that in the year 2018 June the Sacco borrowed 22M. from KUSCCO to be repaid within 18 months at 13.5% interest P.A. This was done to ease the loan queue which had accumulated to over 40M.
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VI. He reiterated on the notable growth in loans advances and net surplus as indicated in the financial books, this was achieved through prudent management and strict measures put in place in our revised loan policies. VII. He pointed out that the main aim of the committee is to make sure that the loan policies are well implemented in all loans applied as well as putting in place financial controls of Sacco cash flow. In conclusion he advised that if these measures are maintained, the improvement on the results will be expected from this year 2019 moving forward and the long loan queues which had been experienced before will be a thing of the past. VIII. He took members through the budgeted Income & expenditure statement estimates for the year 2019 and 2020. As per the attached report.
The treasurer’s report was proposed by Joseph Mwariri seconded by Josephine Omach. Agenda Topic #7: KUSCCO The chairman welcomed Mr. Josphat Muigai from KUSCCO who shared the following remarks: I. He wanted to see Braemeg SACCO thrive in the financial field and urged the committee to aim higher in its vision to achieve its objectives. II. Mr. Muigai thanked members for attending the AGM in big numbers. III. He congratulated the management committee for collaborating with Cooperative consultancy team in coming up with the Braemeg SACCO strategic plan. IV. He was thankful for the initiation and the facilitation of the Dubai trip by the committee and encouraged members to utilize that offer in order to explore and seize opportunities that are in other countries. V. Thanked members for being loyal shareholders and informed them that the AGM is the platform where society’s decisions are made. VI. He appreciated the management committee for making tremendous growth despite the challenging environment. VII. He challenged Braemeg SACCO to put program in place to benchmark with other growing SACCO’s.
In conclusion he stated that ‘wealth is being created by the savings that are channeled to the SACCO’ therefore
encouraged members to keep up the spirit of saving. Finally thanked members for attending the AGM. Agenda Topic #8: MINISTRY The chairman welcomed Mr. Njoroge Mwangi from the Ministry of Industrialization and Co-operatives. In his remarks, Mr. Mwangi stated the following: I. Thanked members for attending the AGM He also reiterated the sentiments of Mr. Muigai by emphasizing on the importance of such a platform which keeps committee members into account. II. He pointed out that the main objective of the SACCO is to empower its members financially therefore the growth of the society ought to be seen in members.
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III. He alluded to the fact that financial empowerment to members is achieved through the resolutions read in the committee's report. IV. Mr. Njoroge said that the society's growth can be seen through its members and so monthly savings helps an employee realize and achieve something out of employment and enable money to work for him during retirement period. V. He encouraged members to increase their savings and avoid excesses in their salaries which prompts employees to misuse money on unnecessary expenses. VI. He urged members to be cooperative with the committee and if possible increase minimum savings from KES. 1,500 to KES. 2,000. VII. In conclusion he requested members to remain calm till the end of the Annual general meeting session as he pardoned himself to leave the meeting early in order to go and commission an AGM in another SACCO that was scheduled on the same day.
RESOLUTIONS: Resolutions were conducted by the government auditor Mr. Mwai who stood in for Mr. Njoroge. They were listed and decided as follows; 1. Retain borrowing powers of 30 million for the financial year 2019. This proposal was approved by members with a proposal from Edward Wakoli and seconded by Janet Kirumba. 2. To retain the ministry as an auditor for the financial year 2019. This proposal was approved by members with a proposal from Benedict Nzioka and seconded by Moses Chege. 3. Increase a normal loan from the current ceiling of 2m to 3m This proposal was approved by members with a proposal from Edward Sakwa and seconded by George Biaru. 4. To approve honoraria of KES.600, 000 for the current management. This proposal was subjected to voting thereafter approved by members with a proposal from Rebecca and seconded by John Macharia. 5. To approve dividends payments to members at a rate of 10.2% and approve that 10% of each member dividends be retained as member contributions. Proposed by Rabecca Aoko and seconded by John Macharia. 6. To approve an increment of monthly contributions from the current KES.1500 to KES.2000. Proposed by Dorothy Makau and seconded by Edward Wakoli.
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ELECTIONS: Mr. John Mwai read names of all the officials whose terms had expired and asked members to participate in electing new leaders of the committee. Members were required to propose contestants as per the vacant positions. The elections on the floor were as follows; Braeside Campus (management committee position) Maureen Kanyago was proposed by Joseph Mwariri and seconded by Trizah Kimani. Jacqueline Murotsi was proposed by James Kanene and seconded by Edward Wakoli. After voting the results were as follows; Maureen Kanyago-44 votes Jacqueline Murotsi-125 votes Jacqueline Murotsi was the duly elected Braeside campus representative
Braeburn Gitanga Campus (management committee position) Rowland Njagi was proposed by James Chege seconded by Danson Mucheru George Kadondi was proposed by Nelson Ambata seconded by Jackson Kiriga. Denis Mokua was proposed by Vincent Rapando seconded by Richard Ontiri however Mr. Mukua declined to contest the position as proposed. When the voting process came by, members unanimously by show of hands voted for Rowland Njagi leaving the process without votes cast and so he became the duly elected representative for Braeburn Gitanga campus.
Braeburn Garden Estate Campus (management committee position) Nicholas Sabasi was proposed by Gerald King’ori seconded by Anne Wanjiru. The contestant was proposed unopposed on the floor of the AGM therefore he was unanimously elected as BGE campus representative.
Braeburn Garden Estate Campus (supervisory committee position) Sylvia Wangechi was proposed by Anne Wangari seconded by Maureen Ogola. Risper Mboo was proposed by James Ogada seconded by Isaac Mwema. Peter Njuguna was proposed by Felista Nyutu seconded by Mburu. After voting was the results were as follows; Sylvia Wangechi -179 votes Risper Mboo -2 votes Peter Njuguna – 30 votes Sylvia Wangechi was the duly elected Braeburn Garden Estate (SC) representative.
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Agenda Topic #9: A.O.B 1. The chairman asked the newly elected officials to cross the floor and take seats on the dais with other officials. He told members that after officials being elected as campus representatives, another session of elections for committee positions shall be conducted guided by the ministry official. 2. Mr. David Nzango and David Kibe gave a word of appreciation for the cooperation that existed between members and officials and asked the new officials to uphold integrity at all times for the success in SACCO leadership.
VOTE OF THANKS
The vice chairman gave a vote of thanks to the invited guests, the members and the officials. He thereafter ushered in the MC Chairman who made his remarks by thanking the SACCO members for having confidence in their SACCO officials. He expressed gratitude to the outgoing committee members; David Nzango and David Kibe for their invaluable contributions during their tenure in leadership. Mr. chairman thanked Braemeg SACCO members for having confidence in their committee members
Meeting Adjourned 7:15pm Closing Prayer Philemon Manga Next Meeting Date To be Communicated
Signed:______Signed:______
Secretary Chairman
Date:______Date:______
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3. CHAIRMAN’S REPORT
3.1 Introduction.
The Ministry of industrialization and enterprise development representatives, KUSCCO representatives Present, Coop bank officials present. Braemeg SACCO members, fellow management committee members, the supervisory committee, SACCO staff all protocols observed, Ladies and Gentlemen. Good afternoon. It is with much pleasure that I welcome you all to Braemeg SACCO AGM 2021.
3.2 Global & National Economic Outlook.
According to economic outlook November edition 2020, the global and Kenya’s economy has been hit hard by COVID-19, severely affecting incomes and jobs. In response to the pandemic, Kenyan government deployed both fiscal and monetary policies to support the healthcare system, protect the most vulnerable households, and support businesses to help preserve jobs, incomes and the economy’s productive potential.
Tax revenue dropped below target, due to the market slowdown in economic activity, as well as tax relief as part of the government’s fiscal response package.
Covid -19 challenges have made future economic projections uncertain. This has a negative effect to Braemeg SACCO too. Due to crisis, we had transferred most of our operations online. At one point we closed our offices and had staff operate from their homes.
Most of the meeting too are conducted online unless when extremely necessary to hold physical meeting. Online meeting for the MC and SC is the new norm. Some members retired, others went home on unpaid leave and some experienced salary cuts. The outcome of this was a delay in remitting their contributions in full among others.
Despite the hard times shared above, please allow me to present to you our performance in the year 2020. 3.2.1 Society Asset Base.
Braemeg SACCO Asset base grew to KES. 436,811,883 in December 2020 from KES. 390,999,225 in December 2019 an increase of 11.72%.
3.2.2 Membership.
The membership of Braemeg SACCO continues to grow steadily. In our last AGM, we had a total of 1,109 active members. Even though this was better than the previous year, we promised to market and explore more avenues to grow our SACCO’s membership. We are proud to report that as of today, our current active membership stands at over 1,300 members. This growth is attributed to new Braeburn staff members, members’ spouses and members from other International schools joining the SACCO. Staff members from Nairobi Academy, Brookhouse, St. Christopher’s and more recently Sabis International schools. We urge you to reach out to your spouse and children and encourage them to join Braemeg SACCO so that we may all grow together. 14 | P a g e
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3.2.3 Deposits & High savers.
Braemeg SACCO’s member’s deposits have recorded a tremendous growth pattern, growing by 12.92% in December 2020 to KES. 374,058,008 from KES. 331,259,914 in December 2019. In the year under review our monthly highest saver deposited over KES. 100,000 every month.
May I take this opportunity to recognize our highest saver whose deposits stand at KES. 5,208,205 as at 31st December 2020. As an indicator of growth in members deposits, the MC appreciates 83 members who have hit ksh.1 Million and above in deposits.
3.2.4 Strategic Plan 2019-2023.
Strategic plan 2019-2023 informs most of the decisions made by the MC. I wish to invite you all to constantly look at this important document which is available in our website. Chapter 5 of the strategic plan outlines the implementation matrix. This covers the route map to where we desire to be in 2023. Some of the deliverables have been achieved and some is still work in progress. Key areas include membership, our products, financials, Board of directors, Staffing, risk management and working environment. In our strategic plan we advised that we need to grow our share capital from KES. 1000 per person to a higher amount. Each member shall raise their share capital to Ksh.10,000 by end of June 2021. We appreciate members who have attained this amount. This will earn dividends while your deposits will earn interest. Due to the effects of covid-19 disruptions the board proposes to review the 2019- 2023 strategic plan in the course of the year.
3.2.5 Information & Technology.
The MC is in the process of obtaining a new Information Management system. Once installed our members will be able to access & update their information at the click of a button, access of accounts statement. Guarantors statements will be made accessible through the website, members portal, online loan processing & enhanced communications with our members among others. The new system will also enable us to generate and provide the reports as required by the authority.
3.2.6 Staff Matters.
Our SACCO has grown rapidly, we wish to thank most sincerely, Paul, Jane and Emmanuel. Its important to share that due to heavy workload, we have engaged one internship workforce. We looking at involving services of an internal auditor, credit officer, ICT and marketing officer. This will not be done right away as we mitigate Covid challenges but soon. Again, this is in line with the authority. [SASRA] Please note that we may also be forced to look for a bigger office in the near future as we look at expansion.
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3.2.7 SACCO Societies Regulatory Authority [SASRA].
The SACCO Societies Regulatory Authority (SASRA) is a state corporation established under the SACCO Societies Act, 2008(Cap 490B). The principal mandate of the Authority is to license and supervise SACCO Societies to undertake deposit-taking SACCO business (popularly known as Front Office Service Activity or FOSA) in Kenya. Beginning 2021, SASRA will also regulate all non-deposit taking SACCO with a deposit of KES. 100,000,000 and above. Our Deposit is over KES. 400,000,000. We are thus in the process of applying for registration.
3.2.8 Corporate Social Responsibility [CSR].
My management believes and encouraged the act of giving back to the society. This year we supported one of our members who had a sick child with a huge hospital bill of over 1million. The SACCO paid part of their hospital bill with KES. 30,000.
3.2.9 Promoters and Partners.
We wish to appreciate the leaders and the dream bearers of this organization. We note that some of them have since left Braeburn to other destinations or retired. My board wishes to recognize the following: Promoters
Muchigi Mburu, Esmail Mehbooh, Sarah Gichuhi, Samuel Gachago among others.
Campus representatives
Harrison & Beatrice - Mombasa, Kimani- Imani, Hope - Kisumu, Mutembei-Nyanuki, Ben- Arusha Braeburm school directors, the human resource managers, the head teachers, finance manager and the payroll administrator. We appreciate Mr. Francis Waweru of St. Christopher for his invaluable support.
3.2.10 Elections.
It’s the function of the AGM to elect directors. As guided by our election policy and the Ministry, Let’s get the best human capital to prosper Braemeg SACCO to greater heights.
3.2.11 Conclusion.
We wish to thank you most sincerely for attending today’s meeting. Your ideas/opinions as you will give today will go along in improving this SACCO. Your presence here today is a clear indicator of your support to this SACCO. We are very grateful.
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3.3 Resolutions
3.3.1 Resolutions (2020)
I. To approve interest on deposits payments to members at a rate of 11.2%.
II. To approve honoraria to the current management committee and supervisory committee of KES. 900,000.
3.3.2 Resolutions (2021)
I. To retain the borrowing power at 30 million Kenya shillings for the financial year 2021.
II. To retain the ministry of Co-operatives as auditors for the financial year 2021.
III. To approve interest on deposits payments to members at a rate of 10.3%.
IV. To retain 5 % of the paid interest on deposits.
V. To approve honoraria to the current management committee and supervisory committee of KES. 900,000.
God bless you all.
Rowland Njagi,
Chairman, Braemeg SACCO.
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4. CREDIT COMMITTEE’S REPORT
4.1 Introduction.
The guest of honor, Ladies and Gentlemen, on behalf of the Credit Committee (CC), I thank you for finding time out of your busy schedules to attend this important occasion, the 2021 AGM of Braemeg SACCO Ltd.
The credit committee is mandated to provide oversight over the SACCO’s Credit Policies and management of Credit Risk through careful inquiry into the character and financial conditions of each loan applicant, and the guarantors, to ascertain ability of the applicant to repay the loan fully and promptly.
The Committee takes this opportunity to thank and congratulate the entire membership for their continued patronization of our credit products and services during the year 2020. Our report covers loan disbursement within the year in comparison with the previous two years and loan default management.
4.2 Share capital. It’s worth noting that our share capital is growing from KES.1,000/- to KES. 10,000/- which will mark a 90% growth for our Share Capital in the year 2021. This is a commendable growth in the society and we project even greater growth in future. We encourage members to invest more in share capital. The Share capital will in the near future start to earn Dividends as the Deposits earns Interest.
4.3 Loans Disbursement.
During the year 2020, loans worth KES. 227,088,486 were disbursed. This was an improvement from KES. 250,742,755 disbursed in the year 2019 and KES. 215,545,064 in the year 2018. Our Gross loan portfolio grew from KES. 336,256,627 in 2019 to KES. 380,894,434 in 2020. We urge all members to exploit the various loan products that the society has put in place namely: Emergency Loans, Education loans and Normal and Development Loans.
4.4 Loan Turnaround Times. Our SACCO’s turnaround time for the Normal & Development loan has been reduced from 60 days to 30 days. Emergency & Education loans have been reduced to 48 hours during the week days. This has been made possible through your commitment to pay your loans promptly hence improved cash-in flows.
4.5 Delinquency Management. The amount in default as at 31st December 2020 we categorized as follows: Termly Contract Employees on unpaid leave from March 2020. Catering & Transport staff on Unpaid leave from September 2020. Retired & Contract terminated members. Mainstream loan defaulters
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However, as at 3rd April 2021 the Termly contracts & all catering & transport staff resumed payrolls hence the position changes to only mainstream loan defaulters, retired & terminated members.
We continue to remind our dear members to pay their deposits and loans promptly to minimize cases of default.
Measures put in place We monitor loan delinquency on a monthly basis and are in constant communication with the defaulters together with their guarantors. We have allowed loan restructuring of defaulted loans where members have resumed regular payments. Debt Collection services have been enhanced and we are in the process of on boarding professional debt collectors and auctioneers to assist in default collection.
4.6 Conclusion The committee would like to take this opportunity to thank you, the entire membership, for giving us an opportunity to serve you. We look forward to an enhanced partnership throughout 2021.
“The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought and so broadens the mind.” -T.T. Munger Regards,
Credit Committee.
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5. EDUCATION COMMITTEE’S REPORT
5.1 Introduction. The education committee is responsible for providing education to the members, the staff and the board on the various subject matters. We are also responsible for exploring new ways, techniques and methodologies the SACCO can employ in order to enhance efficiency and improve service delivery. 5.2 New Implementations & Reviews.
5.2.1 Education Loan. The management committee is pleased to introduce an additional loan product known as the Education Loan. This product is designed to assist members to pay school fees in various institutions of learning. The terms of this product are: I. The maximum amount one can borrow is following 3 times the member's deposits up to KES. 150,000 subject to the one-third rule. II. The interest charged is 13% per annum on a reducing balance III. The loan is repayable within 12 months from the time of issue.
5.2.2 Telegram Platform.
We have created a Telegram platform to enable our members to receive regular news updates, SACCO documents and any other relevant communication from SACCO. We encourage all members to join. Once on the Telegram App, search for Braemeg SACCO or join by using this link https://t.me/braemegSACCO.
5.2.3 Website. Our SACCO website is now online and accessible through the address www.braemegSACCO.co.ke. You can conveniently access information on the SACCO and the various saving and loan products offered. You can also view or download the SACCO’s Policies, By-Laws and also the savings or loan product form.
The members’ portal is also active and you can now access your profile and view your statement among other details. The portal is accessed by your membership number as the username and your first name in lower case as the password. Remember to change your password after you log in.
5.2.4 Interest on Saving Products. In spite of the effect of the Corona pandemic, the SACCO continues to grow steadily. This growth is not only a result of proper management but also the continued patronage of members to SACCO services and products.
In the past 3 years, members who subscribed to the Christmas packed have been getting an interest of 3% on their total Christmas savings. The management committee resolved that all savings packages, i.e., Christmas package, Braemeg TOTO package and Holiday package shall earn an interest of 3% on their total value. We believe this move is beneficial to both the members and the SACCO at large. 20 | P a g e
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5.2.5 Last Respect (Benevolent Fund).
The loss of a loved one is in most cases associated with high funeral costs, and in some cases, pending hospital bills that stretch one’s finances to the utmost limit. For this reason, Braemeg SACCO partnered with UAP Old Mutual Life & Stanbic Insurance Agency to offer cover to Braemeg SACCO members and their dependents in the unfortunate case of death. The cover caters for: I. The member (principle) II. The member's spouse III. 4 Children of the member (Additional KES. 500 for any extra child) IV. Both parents of the member V. Both parents of the member's spouse
The packages offered are: I. At a premium of KES. 2,700 per annum a member is covered to a tune of KES. 100,000. II. At a premium of KES. 5,400 per annum a member is covered to a tune of KES. 200,000. III. At a premium of KES. 13,500 per annum a member is covered to a tune of KES. 500,000.
For more information on this product or the subscription form, please visit either the website, the SACCO’s Office or your campus representatives. 5.3 Training & Workshops. Education is an important aspect of Braemeg SACCO that serves not only as a means to encourage members’ patronage of SACCO services and products, but also provide avenues for members to get informed, trained and updated on various topics that impact our day to day operation and activities.
Last year we held successful virtual training sessions for Braeburn retirees, our office staff and the Board of directors. This success gave us the blueprints of how to conduct virtual training and we plan to hold a virtual Education Day for the members. 5.4 Trips
Trips not only create lifetime memories for you but also, meeting different people from vast cultures and societies provides an education that is impossible to get in any learning institution. For this reason, we always look to partner with reputable and affordable Tours and Travel agencies so that we organize trips for our members.
It is unfortunate that the impact of the covid-19 on hotels, airlines, and the different tourism destinations, has made us suspend all plans for trips until the situation is fully contained.
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5.5 Appeal to Members.
1. Save! Save! Save! All the financial experts we have invited to our Education days have repeatedly encouraged us to save. Saving your money at Braemeg SACCO will: I. Build your cash reserve. II. Increase your investment opportunities. III. Increase your loan borrowing powers. IV. Give you the option to get loans at low-interest rates. V. Give you high returns in terms of interest on deposits. VI. Keep Braemeg SACCO stable and growing.
You can conveniently top up your deposits or pay your loans by making deposits to the SACCO account via Mpesa. To do this:
I. Select Mpesa from your Safaricom Toolkit II. Select Lipa na Mpesa III. Select Paybill IV. Enter the business number for Cooperative Bank. I.e. 400200 V. Enter the SACCO’s Account number i.e. 01120000540400 VI. Enter the amount you wish to deposit. VII. Enter your Mpesa Pin and confirm the transfer. VIII. You will receive a message from Cooperative bank confirming the transfer. Forward this message to the SACCO staff or any of the SACCO officials specifying whether it’s a loan repayment or topping up your deposits.
2. Subscribe to all the available packages offered by Braemeg SACCO. These include: I. Christmas Package. II. Braemeg TOTO. III. Holiday Package. IV. Last Respect (Benevolent Cover)
Kindly visit the website for more information on these saving products.
3. Attend Education days organized by the SACCO from the beginning to the end. This is because apart from getting training by various specialists in the field of Savings, Financial management and investments, we use this forum to give you updates on new products, implementations and upcoming plans. 4. Uphold the cooperative principles of self-help, self-responsibility, democracy, equality, equity, solidarity, social responsibility and caring for others.
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5.6 Conclusion
In conclusion, we would like to thank the management committee for their unending support, the staff for always being willing to help and all of you for your dedication, commitment and support to Braemeg SACCO.
We look forward to seeing you during this year’s virtual Education Day. May God bless Braemeg SACCO!
Thank you.
Regards,
Education Committee.
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6. TREASURER’S REPORT
6.1 Introduction
Good afternoon all. This is one of the most important parts of AGM where we discuss the money matters and with that note I am pleased to present to you the Treasurer’s report on the 2020 audited Financial Statements. My report as usual in this AGM will focus on a brief overview of the finances of our SACCO and Highlight some of the challenges faced to the financial situation of Braemeg SACCO on the financial year 2020, and the revised budget for the year 2021 as well as budget proposals for the year 2022 for your approval.
6.2 Liquidity.
One of the sectors that has been worst hit by disruptions of COVID-19 pandemic is the SACCOs, the effects were felt across all sectors of the country’s economy and Braemeg SACCO was not spared either. The impact affected our liquidity due to the measures taken to salvage the hard situations in the 2020 financial year.
I. A number of our members were sent on unpaid leave, others experienced salary pay-cut and this resulted in members varying their savings downward to cater for their needs, thus affecting our liquidity. II. The Cooperative Alliance of Kenya also urged SACCOs to consider suspending interest on the loans taken by their members who have been suspended on their employment until they are reinstated and as a result, this also affected the liquidity. III. As a Board we also couldn’t put deaf ears to the cry of our members who were greatly affected by salaries pay-cut and therefore we had to cushion them by reducing a small percentage of their loan deductions upon request.
Effective planning, cutting cost on expenses where possible and management of members funds by strictly engaging in the core business of the SACCO has given our members confidence. They have continued supporting and saving in the SACCO and I can boldly say that Braemeg SACCO has remained Stable despite all the economic challenges experienced in the year 2020.
6.3 Need for Enhanced Risk Management measures
There is a need for Braemeg SACCO to come up with effective risk management strategies to ensure that its financial resources are not affected in case of any unforeseen circumstances. The risks should be prioritized and practical plans to be made on how to deal with any arising circumstance, to that effect we have come up with a risk management kit in 2021 proposed budget.
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6.4 2021 moving forward
It’s also an ideal time Braemeg SACCO embraces fully in technology, this will not only help the SACCO in cutting cost on expenditure and serve its members effectively but also will spur the SACCO’s productivity. I continue to encourage all our members to increase their patronage of our products and services so that the improvement of the results is experienced and achieved.
6.5 External Borrowing.
Our Borrowing powers remained at KES 30,000,000 in the financial year 2020. We only had one loan borrowed from KUSCCO which was issued in March 2020 of KES 15,000,000. This was done to ease the loan queue. The Loan balance as at 31st December, 2020 was KES 4,534,849.
The Interest on Deposits Rate
The reduction on rate of interest on deposits rate was as a result of the following reasons;
I. Reduction of interest income from loans & advances due to the economic effects of Covid-19 pandemic resulting in our members being put on unpaid leave & others being asked to retire voluntarily. This resulted in loan defaults by these members thus recording a drop in interests from loans advanced. II. Increased Credit risks on our total loan portfolio due to uncertainty of the members sent on unpaid leave & retired members who had their loans restructured, there was an increase in loan loss provisioning from 1% to 1.5% Charging KES. 2,350,857 to our 2020 Profit & loss accounts.
I have recorded some positive changes in 2020 and I would like to point out some of key performance highlights in our financials as follows: - PARAMETER 2020 (KES) 2019(KES) VARIATIONS (%)
Total assets 436,811,883 390,999,225 11.72%
Members Deposits 374,058,008 331,259,914 12.92%
Loans to Members 380,894,834 336,256,627 13.28% Total Revenue 49,659,574 48,970,730 1.41% Total Expenses 9,786,418 10,765,644 (9.10%) Interest on Deposits(percentage) 10.3% 11.2% (8.03%) Interest on Deposits(gross) 37,000,000 35,000,000 5.71% Surplus for the Year 39,782,305 38,139,266 4.31% KUSCCO Central Savings 22,943,520 20,845,267 10.07%
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Finally, I would like to take you through the revised budget for the year 2021 as well as budget proposals for the year 2022 for your approval.
C/S NO.5315
BRAEMEG SACCO 2021 BUDGET PROPOSAL.
INCOME Approved (2020) Actual (2020) Revised(2021) Proposed (2022) Interest Income (KES) (KES) (KES) (KES)
Loans & Advances 39,229,563 40,409,612 48,108,771 52,919,648
Treasury Bills & Bonds 36,412 - - -
Fixed & Call Deposits 183,443 275,061 473,104 520,414
KUSCCO Savings 201,331 406,319 593,225 652,548
Other Income.
Dividend from KUSCCO 29,332 - 32,942 36,236
Dividend from Co-op Bank 1,350,000 1,556,738 1,945,922 2,140,514
Loan refinancing fees 1,335,240 1,141,907 1,427,384 1,570,122
Loan Insurance fees 6,108,320 5,821,937 7,277,421 8,005,163
Entrance fees 150,000 42,000 98,000 107,800
Reinstatement fees 10,000 6,000 10,000 11,000
Cash Transfer & 73,400 - 88,814 97,695 Withdrawal Income KUSCCO Rebates 300,000 - 363,000 399,300
TOTAL TURNOVER 49,007,041 49,659,574 60,418,583 66,460,441
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EXPENDITURE.
Approved (2020) Actual (2020) Revised(2021) Proposed (2022) Administrative Expenses (KES) (KES) (KES) (KES) Consultancy fees 140,000 460,062 385,000 423,500 Corporate Social Responsibility 180,000 30,000 230,000 253,000 External Audit fees 100,000 35,700 135,000 148,500 Business Disaster Management - - 235,000 258,500 Insurance Risk Management 1,600,000 1,064,000 1,332,000 1,465,200 Office Electricity 15,000 11,500 21,750 23,925 Repairs & Maintenance 33,400 - 51,300 56,430 Ushirika Day 50,000 55,000 Internet Subscription 48,000 48,000 48,000 52,800 KUSCCO Annual Subscription 20,000 20,000 20,000 22,000 Legal Fees 108,000 5,400 108,000 118,800 Website Development & Hosting 150,000 21,700 100,000 110,000 Miscellaneous expenses 50,000 - 50,000 55,000 Land Rates 10,000 - 12,100 13,310 Debt Recoveries 620,000 - 620,000 682,000 SASRA (Authorizations & Licensing) - - 100,000 110,000 Nairobi County Licenses 102,000 - 102,000 112,200 Office Expenses 25,000 29,197 47,300 52,030 Office Rent 180,000 84,000 180,000 198,000 Printing & Stationery 80,000 2,910 80,000 88,000 Software Maintenance 88,000 78,000 78,000 85,800 Strategic Plan Review 250,000 - 275,000 302,500 Telephone & Postage 155,470 144,750 125,000 137,500 Supervision Fees 15,000 - 135,000 148,500 Provision for loan Impairment (1.5%) 634,200 2,350,857 2,423,540 2,665,894 Transport, Travel & Subsistence 131,250 60,218 75,000 82,500
Total Administrative Expenses 4,735,320 4,446,294 7,018,990 7,720,889
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STAFF COSTS
Approved (2020) Actual (2020) Revised(2021) Proposed (2022)
(KES) (KES) (KES) (KES) Salaries & Wages 2,000,000 1,585,800 2,000,000 2,200,000 Staff Medical & Insurance 6,000 80,000 88,000 Pension Contribution 14,000 7,200 14,000 15,400 Staff Education & Trainings 145,000 20,200 145,000 159,500 Total Staff Cost 2,159,000 1,619,200 2,239,000 2,462,900 GOVERNANCE EXPENSES AGM Expenses(Pre 2019 AGM 850,000 77,500 1,000,000 1,100,000 preparations) SGM Expenses 650,000 - 750,000 825,000 Retirees Virtual Meeting 850,000 20,500 1,000,000 1,100,000 Directors traveling expenses - - 185,000 203,500 Committee Sitting Allowances 800,000 970,800 1,050,000 1,155,000 Committee Training 300,000 536,000 550,000 605,000 Total Governance Expenses 3,450,000 1,604,800 4,535,000 4,988,500 OTHER OPERATING COSTS Depreciation 52,318 44,258 56,401 62,041 Interest on Christmas Savings 585,000 515,043 615,332 676,865 Software Amortization 153,400 47,383 435,000 478,500 Total Operating Expenses 790,718 606,685 1,106,733 1,217,406 FINANCE COST Bank Charges 385,000 244,887 315,200 346,720 Interest on External Loans 2,321,500 1,264,552 2,233,550 2,456,905 Bank Overdraft Charges 175,000 - 175,000 192,500 Total Finance Cost 2,881,500 1,509,439 2,723,750 2,996,125 MARKETING EXPENSES 300,000 - 250,000 330,000 TOTAL EXPENSES 14,316,538 9,786,418 17,873,473 19,715,820 Income Tax (63,178) (90,851) (159,949) (175,944) NET SURPLUS/(DEFICIT) 34,627,325 39,782,305 42,385,161 46,568,677 FOR THE YEAR
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CAPITAL BUDGETS Approved (2020) Actual (2020) Revised(2021) Proposed (2022) (KES) (KES) (KES) (KES) Software Upgrades 75,000 - 2,000,000 2,200,000 Furniture & Fittings 150,000 - 150,000 165,000 Computer & Office Equipment 175,000 16,363 175,000 192,500 TOTAL 400,000 16,363 2,325,000 2,557,500
Thank you, God bless you and have happy Easter Holidays
Joseph Thuo,
Treasurer, Braemeg SACCO.
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