Tier one Sacco members enlightened on how their personalities may determine how they spend, save and invest money
By George Gichuki
2027 will be a momentous year for Mentor Sacco. Started way back in 1977 by a small group of 533 teachers from the then Murang’a district who were saving only twenty shillings monthly, the tier one Sacco will celebrate its golden jubilee next year. Over the years, Mentor Sacco has transformed thousands of households by supporting them to achieve their financial goals ; for instance paying for studies, setting up businesses and securing their future. Mr. Nelson Nyoro, a seasoned co-operative practitioner who is well versed in financial management is a good case in point. He was the main facilitator during the Mentor Sacco members’ education and information forum at Kianjiru-ini Comprehensive School – Maragua sub-county.
Taking a trip down memory lane , Mr. Nyoro gave a recount of how his parents ( who were both teachers and members of Mentor Sacco) educated him through the financial support of Mentor Sacco. “ I went through secondary school courtesy of Mentor Sacco,” he reminisced adding that his school fees cheques would either be drawn in favour of his mother or father by the Sacco and at no time did he miss his studies. In the same vein, his parents were financed by the Sacco to set up a business in Kiria-ini town; a sound investment decision that they are relying on during their retirement.
Today, Mentor Sacco is in the tier one category according to SASRA and it has a presence beyond Murang’a county, an asset base of over Kshs. 18.5 billion and a membership of over 50,000. “ This steady growth is a testament that you should never despise humble beginnings because that is how big things are fashioned,” Mr. Nyoro noted. He further said that members’ education and information days are important forums because they enable the participants to bond and acquire knowledge on how to make well informed financial decisions. “ A co-operative is a socio-economic entity and it therefore needs to create opportunities for members to meet and share experiences, hence strengthening their bond,” Mr. Nyoro emphasized.
A journey of fifty years
Celebrating fifty years demonstrates that as a brand, Mentor Sacco is resilient. In this regard, Mr. Nyoro noted that to a very large extent, the Sacco has navigated this demanding journey successfully because of having loyal and dedicated members. “Mentor Sacco members embrace their institution, they patronize it, and they love it to the extent that they even recruit new members voluntarily, hence contributing a lot to its growth,” he said. The second predictor to this growth is prudential financial management. “ It is apparent that the Sacco makes prudent financial decisions going by how it has built a strong institutional capital and core capital, maintained a high quality loan book and grown its balance sheet over the years,” Mr. Nyoro noted.
Thirdly, both at the board and management levels, Mentor Sacco has enjoyed strong leadership and governance since its establishment. “ Mentor Sacco has largely benefited from good leaders who have protected, preserved and grown the resources they have been entrusted with by the members; they are very faithful stewards,” said Mr. Nyoro.
Moreover, Mentor Sacco has adapted effectively to the changing business environment. “ When there has been a need to advance in technology, or a new regulatory framework has been introduced, the Sacco has adapted fast hence avoiding conflict with the evolving business environment,” Mr. Nyoro noted.
Know thyself : the manyattas analogy
Mr. Nyoro based his presentation on how to make prudent financial decisions on the wise words of Socrates, a Greek philosopher : “ Know thyself.” He emphasized that what you know about yourself influences how you make important decisions about money. “ How you think about money can be a product of changes in your emotions, while how you spend, save, borrow and invest money could be a function of your personality,” he observed.
To illustrate that point, he gave an analogy of individuals living in four different manyattas ( a traditional homestead of pastoralist communities in East Africa). Going by this analogy, he said that those living in the symbolic red manyatta are ambitious, confident and risk takers. Additionally, they view money as a source of success. Therefore, they borrow heavily in order to invest and achieve high returns. These individuals also purchase goods of ostentation – like luxury vehicles and big houses – in a bid to display their status in the society. Unfortunately, they often make wrong investment decisions because they don’t consult and they are easily lured by the promise of quick and high returns.
Secondly, the residents of yellow manyattas live for the moment according to Mr. Nyoro. “They love spending money a lot and should they fail to attend an event because of a shortage of the same, they can get depressed,” he cautioned. Additionally, they borrow to finance vacations. Much as the company of these individuals is pleasant, they can easily get into financial challenges because of spending money lavishly and without budgeting.
The third category of people resides in green manyattas. “ They spend money cautiously and are keen on supporting their relatives and friends financially should a need arise,” Mr. Nyoro noted. These individuals shun borrowing and would rather finance their projects ( however big) using their savings. The fourth group resides in blue manyattas. They are risk averse, calculative and save money with a long term view. Based on this analogy, Mr. Nyoro advised Mentor Sacco members to identify the manyatta they are residing in, and use that knowledge to improve their financial status.
Proposed reforms
The savings and credit co-operative societies ( Sacco) sub-sector in Kenya is quite dynamic. To that end, currently, a number of reforms have been proposed to ensure that its players are stable and are operating in a regulatory framework that befits their size. Currently, Saccos in Kenya have mobilized deposits amounting to Kshs. 1.3 trillion, demonstrating the critical role that they play in deepening Kenya’s financial sector. More importantly, these deposits need to be safeguarded. Consequently, the Sacco Societies ( Amendment ) Bill 2025 proposes to establish a deposit guarantee fund – similar to the Kenya Deposit Insurance Corporation for commercial banks and the Policyholders Compensation Fund for insurance companies. The proposed fund will reimburse members up to a specific limit of their deposits, in the unfortunate situation that their Sacco is placed under statutory management or it is declared insolvent. The reimbursement does not include non-withdrawable shares. Ultimately, this will enhance the Sacco’s stability and the safety of members’ funds. In the same vein, members will be confident while saving and investing in their respective Saccos.
The other proposal is to create a central liquidity fund in order to ensure that in case a Sacco experiences liquidity challenges, the said facility can offer them quick relief. In this regard, the Saccos with excess liquidity will deposit the same in the fund. In turn, these deposits will be borrowed by the Saccos experiencing liquidity challenges at competitive rates. This fund will be a lender of last resort similar to the Central Bank of Kenya ( CBK). The Bill is also proposing a change in the Sacco’s business model so that they can start participating in the national payment system like commercial banks. Consequently, the payments made by Saccos will be processed efficiently and effectively.
Governance
With a current membership of over 50,000, Mentor Sacco has experienced a lot of growth over the last five years, necessitating a change in its governance structure from general to delegates meetings. This is a need that the Sacco is currently addressing even as it endeavours to comply with a directive from the Ministry of Co-operatives requiring the co-operative societies with over five thousand members to change from the general to delegates system while conducting their general meetings. “ Conducting a general meeting for over 50,000 members without compromising its quality is not a walk in the park, and hence the urgent need for Mentor Sacco to embrace the delegates system of governance,” Mr. Nyoro told the members. As curtains are drawn on the Annual General Meetings ( AGMs) , the members of Mentor Sacco will still continue meeting, comparing notes and bonding during their education and information forums.
