A Murang’a-based Sacco has advanced more than Sh200 million cheap credit facilities to Micro, Small and Medium Enterprises (MSMEs) from a loan facility sourced from Kenya Development Corporation (KDC).
Last year, Amica Sacco secured a loan facility of Sh 300 million from KDC under the Safer project aimed to provide MSMEs with cheap credit facilities.
During the Sacco’s 27th AGM, Amica Sacco CEO Dr. James Mbui revealed Sh110 million had been advanced to entrepreneurs and another Sh118 dedicated to agribusiness members.
The credit facilities, said Mbui, have helped MSMEs in the county grow their businesses, thus contributing to growth of the economy.
He noted they have almost Sh100 million from KDC asking members of the Sacco to take advantage of the credit facilities to boost their businesses.
“Majority of our members are farmers and small-scale business people. There are available funds from KDC and our members can take advantage of the money to grow their enterprises.
“Farmers can venture to boost productivity by investing in the value chain and focusing on value addition of their produce,” said Mbui.
The CEO noted that the Sacco will continue to build strategic partnerships with lenders offering affordable rates, such as the Commodities Fund and Agricultural Finance Corporation, to mobilize affordable capital.
Mbui further noted they are working to introduce a Money Market Fund account to meet the increasing demand from economically active Kenyans and to compete effectively with other investment companies.
This product, he explained, will empower members to grow their Sacco investments steadily over time, benefiting from competitive and attractive interest rates compounded monthly, while enjoying the convenience of accessing their funds on demand.
The CEO observed that for the Sacco to realize its 2025 targets, they are focusing on diversifying offerings to serve high-net-worth customers, chamas, and institutions.
“At the same time, we are exploring safe investment opportunities beyond traditional interest income to enhance our investment income,” he stated.
Mbui continued, “In 2024, we raised Sh82.8 million through diversified investments, and we’re aiming to grow that by 69 percent to reach Sh140 million this year.”
Meanwhile, the CEO observed that due to economic hardships in the country, Sacco’s non-performing loans grew from 14 percent to 16.8 percent last year.
“We are committed to responsible lending and closely monitoring our loan performance every day to enhance our loan book management,” he said.
Mbui divulged that they have restructured Debt Recovery Unit (DRU) to manage the nonperforming loans to ensure financial stability as we prioritize short-term lending.
“We are also automating credit processes to streamline loan applications, approvals, and disbursements to improve efficiency, accuracy, and transparency,” he added.
The Sacco’s Chairman Jediel Kahungu said this year they will streamline lending by digitizing and automating our credit processes.
“We are in the advanced stages of implementing a loan appraisal and origination system to help us build a high-quality loan portfolio.
Once fully deployed, this system will eliminate manual loan origination, enhancing speed, accuracy, and transparency in our credit processes,” he stated.
By Bernard Munyao
