Teachers set to own bank

Teachers in the country are set to own their own bank following an impressive growth of their savings society.

The proposed Mwalimu Bank to be run by Mwalimu National Sacco Society Limited is also expected to offer a wide range of services to the public, generating more business and leading to high profitability for Sacco members.

While addressing delegates during the Annual Delegates Conference, Mwalimu Sacco Chairman Mr Shem Motuka said the Sacco deposit grew to Sh18.6 billion this year compared to Sh16.6 billion in 2012 reflecting an increase of 11.4 per cent.

“Cumulative loan portfolio grew from Sh18.9 billion in 2012 to Sh20.9 billion as at the end of December 2013, a growth of 10.4 per cent,” announced Mr Motuka on Saturday during the event at the Nairobi National Museum Auditorium.

He also announced that the turnover of the society grew from Sh3 billion to Sh3.5 billion representing a 15.2 per cent increase.

Mwalimu’s total assets grew from Sh22 billion to Sh24.5 billion in the year under review while the society’s total membership grew to 57,277 from 54,664 representing a 5 per cent increase.

As a result, the society has proposed a rebate payment of 11.5 per cent and dividends of 12.5 per cent based on monthly deposit and shares balance respectively.

Mr Motuka said plans to open a bank is part of the society’s 2014-2018 Strategic Plan which will also see the Sacco venture into insurance brokerage as it aims to bolster profits.

“Setting up Mwalimu Bank will come with several benefits such as the ability to raise deposits on current account at competitive rates,” he said adding that the bank would also provide personalized ATM services.

The Sacco is also in the process of completing a 21 storey commercial building at Nairobi’s Upper Hill Area which is expected to be completed in February 2016.

“Once completed, the building will house the Society’s head office while 60 per cent of the floors will be let out to augment the Society’s income,” added Mr Motuka.

While addressing the same delegates, the Principal Secretary in the Ministry of Industrialisation Dr Wilson Songa while hailing the Sacco’s stellar performance noted the Cooperative movement and especially the Sacco subsector remained a crucial player in the country’s economic growth.

He however said the Savings Societies were facing stiff competition from local banks and asked them to strengthen their model and product offerings to counter such challenges.

“The effective use of technology in the development and delivery of financial products and services is one of the ways in which the sector can position itself for sustained growth,” said Dr Songa.