Customers of one of the largest savings savings and cooperative societies (Saccos) in Kenya, Unaitas, will from Monday be able to operate current accounts and clear cheques only four weeks after Stima Sacco started offering similar services for its depositors.
Unaitas has partnered with ABC Bank which also has operations in Uganda, to clear the cheques on behalf of the Sacco whose deposits rose by 27.06 per cent to Ksh2.7 billion ($31.6 million) for the period ended December last year from Ksh2.1 billion ($25.1 million) for the period ended December 2011.
Tony Mwangi, chief executive officer, Unaitas told The EastAfrican that the new service will help the Sacco attract deposits which its customers have been putting with banks and this will in turn help it get additional funds to lend.
“Cheques will be cleared through ABC Bank. It will take the same number of days it takes to clear a cheque with the banks. Those running businesses will not have to open another account with another financial instituition,” said Mr Mwangi.
Saccos do not offer current accounts because they cannot access the cheque clearing system that is run under the supervision of the Central Bank of Kenya (CBK) and have to partner with those under CBK’s supervision so as to allow their customers to operate current accounts.
Last month Stima Sacco announced that it had started offering a similar service in partnership with Family Bank a move that puts it on equal footing with other financial institutions.
“This will help us mobilise deposits and with this we will be providing our members with a choice,” said Mr Mwangi.
As at the end of last year, Unaitas had advanced to its members loans worth Ksh2.3 billion ($27.2 million), a 47.5 per cent increase from the Ksh1.59 billion ($18.6 million) it had advanced as at the end of December 2011.
The number of its active members grew more than two times to 104,000 from 47,533 after it regularized non-members who participated in a share promotion that was done during that last three months of 2010.
Its directors recommended the payment of Ksh31.6 million ($367,895) or 9 per cent dividend on investment shares compared to Ksh20.9 million ($246,594) also 9 per cent, for the period ended December 2011.
It also said that it would pay 6 per cent interest on sacco deposits for the period ended December 2012, similar to what it paid for the period ended December 2011.
Part of its investment portfolio as at the end of last year included Ksh459.7 million ($5.3 million) in managed funds held by PineBridge Investments and Ksh2.8 million ($32,977) in unit trusts.