Dr. Gerald Ondiek, chief officer for business - County Government of Kisumu (centre) presides over the launch of the Instant ATM at the Kisumu branch. With him, from left to right are: Dr. Gamaliel Hassan, CEO Stima Sacco, Mr. Osman Khalotwa, honorary secretary, Eng. Albert Mugo- national vice-chair and FCPA John Mudany - national treasurer. [PHOTO - COURTESY]

Established forty six years ago by only five individuals, giant sacco has attained phenomenal growth by  being  innovative  and  paying close attention to its members

By George Gichuki

Ome real stories sound stranger than fiction. Their plots are incredible and full of suspense. As they unfold, the audience is left in awe. Such is the story of Stima Sacco.  Indeed, it is hard to believe that Stima Sacco, a leading deposit taking savings and credit co-operative in Kenya, with a membership of 130,000 ,  an asset base of Kshs.40 billion and a  loan  book of over Kshs. 31 billion  was started by only five employees of the then East Africa Power and Lighting Company. In 1974, the five visionary individuals pooled their meagre savings and embarked on an audacious journey of establishing a financial institution that has over the years defied great odds and propelled thousands of Kenyans to economic prosperity. As it were, the few trees that were planted forty six years ago by Stima Sacco’s founders have become a giant forest … an ecosystem of financial success.

“The dream of the five founding members was to attain financial inclusivity among Kenyans because in those days, banking was a preserve of a few privileged people and it was viewed as a status symbol,” says Dr.Gamaliel Hassan, the chief executive officer of Stima Sacco. He adds that even the few individuals who had bank accounts back then would rarely access credit to educate or pay for their families’ medication, invest in business or to put up houses.  Needless to say, attaining financial freedom in such an unfriendly environment was a herculean task.

ARTICULATE: Dr.Gamaliel Hassan, CEO, Stima Sacco during the interview.

When the East African Community broke up in 1977, East Africa Power and Lighting Company which was serving Kenya, Uganda and Tanzania also got fragmented. Locally, it was renamed   Kenya Power and Lighting Company (KPLC) in 1983. Slowly but surely, more and more employees of KPLC who shared the same vision with the five pioneer members continued to join Stima Sacco. KPLC with time gave birth to the Kenya Generating Company (KenGen), the Rural Electrification Authority (REA) and the Kenya Electricity Transmission Company (KETRACO). In the same vein, the Geothermal Development Company (GDC) was established by the government in 2008, while KPLC rebranded to Kenya Power in 2011.

As the workforce of these organizations grew, so did the membership of Stima Sacco.

The opening of the sacco’s common bond in 2010 which allowed individuals from other sectors (including the business community) to become its members was a game changer in its phenomenal growth. “To date, we remain indebted to the five members who started Stima Sacco and we evaluate our performance based on whether we are still faithful to their dream,” says Hassan. “It is the umbilical cord that has continued to keep our goals and aspirations alive,” he adds.


One of the biggest achievements of Stima Sacco is that it was the first in Kenya to be licensed as a deposit taking sacco by the Sacco Societies Regulatory Authority (SASRA) on 4th March 2011. Consequently, it was able to offer front office services activity (FOSA) to its members and they stopped seeking the same from commercial banks. The strategic  move enhanced efficiency and  convenience  in the delivery of services to  the  members. It also created a window for Stima Sacco  to develop more innovative products.

“Another major achievement is that we empower our members for life,” says Hassan. This is  through financing  the education of their families, enabling them to secure their future through savings, extending to them affordable credit which they can in turn use to transform their lives by establishing businesses, investing in property and putting up decent homes. “We work hand in hand with our members from the time they join us up to when they retire,” he adds.


Stima Sacco offers both savings and loan products.  To start with, members save through share capital once they join the sacco and they earn dividends from that. For the last four years, the leading sacco has offered a return of 14% as dividends to its members.

In addition, members earn an interest rebate on their deposits. This is because once those deposits have been loaned, they generate income – a percentage of which becomes the saver’s rebate. For the last four years, the interest rebate of Stima Sacco has been 11%.

SERVING MEMBERS: Stima Sacco Mombasa branch manager, Ann Mbaabu, hands over
a gift to a member during this year’s customer service week.

Members are also able to save through fixed deposits and they earn very competitive interest rates to that end.  The major benefit of this product is that the withholding tax of the interest it generates is only 5%. This is much lower compared to the 15% withholding tax that commercial banks charge on the interest generated by their fixed deposits.  

By the same token, Stima Sacco offers personal, consumer and micro mortgage loans. To start with, personal or emergency loans are short term in nature. Mainly, they are disbursed through the sacco’s mobile banking platform. Consumer loans on the other hand are long term and they are offered for development purposes or working capital for the members’ businesses. Finally, the micro mortgage loans are also long term in nature and their repayment period is twelve years. “We have branded these loans ‘makaazi poa’ and they are very suitable for the members wishing to purchase or construct houses,” says Hassan.

Stima Sacco has partnered with the Kenya Mortgage Refinance Company (KMRC) in offering the micro mortgage loan. “We are an equity shareholder of KMRC and consequently, we have been able to offer a twenty year loan facility to our members for purchasing or putting up houses,” observes Hassan. “This is in line with the affordable housing programme contained in the government’s Big Four Agenda,” he adds.

Stima Sacco also offers cheque books to its members, mainly the ones in business. In addition, its bankers’ cheques are available to those seeking to make payments like school fees. Moreover, its Visa branded automated teller machine (ATM) cards allow members to make transactions globally. By the same token, Stima Sacco serves its members by processing their salaries directly into their respective accounts. Finally, members can make various transactions including:  making deposits and withdrawals as well as application for loans via the sacco’s mobile banking platform that is branded M-Pawa.

Standing out

Being a co-operative, Stima Sacco is not entirely driven by profit maximization.  On the contrary, it focuses on meeting the needs of its members. “Co-operatives (like Stima Sacco) are associations of people, unlike commercial banks which are associations of capital,” says Hassan. Consequently, Stima Sacco’s model is unique. “The biggest strength of co-operatives is that members pool their resources and they leverage on each other in order to attain growth,” he adds.

To illustrate this point, Hassan gives the Navy Federal Credit Union in the United States of America as an example. The giant financial co-operative has an asset base of over Kshs. 9 trillion and it has many subsidiaries, one of them being a commercial bank. In the same breath, Vancouver City Savings Credit Union (popularly known as Vancity) in Canada has an asset base of over Kshs. 5.5 trillion.

“There are a lot of opportunities in the co-operative model which we can tap into in order to grow our asset base,” Hassan says adding that he does view commercial banks as competitors but as collaborators. “We can collaborate a lot with commercial banks in growing the financial space for the benefit of all Kenyans,” he emphasizes.

In order to deliver value to its members, Stima Sacco has embraced some of the best practices in commercial banking and fintechs and blended them with its cooperative model. “We strive to be innovative in our product and service offering and our only constant is change,” quips Hassan. “We have therefore adopted technology and look for solutions that are valuable to our members,” he adds.

 Mitigating the Covid- 19 pandemic

Many businesses across the world have been ruthlessly disrupted by the Covid-19 pandemic. Stima Sacco is not an exception. To that end, in line with the Ministry of Health guidelines and protocols, the leading sacco’s employees have been working on a rotational basis in order to avoid congestion at their workplace.  The sacco has also installed sanitizers in all its offices and branches and it is issuing facemasks and shields to its staff members in order to keep the deadly coronavirus at bay. In addition, the quantity of paperwork used in the organization has been drastically reduced and most of its business is now being conducted online.

By the same token, members are observing social distancing while being served in the branches in order to enhance their safety. For the members who have lost their jobs (and hence incomes) due to the Covid-19 pandemic, or whose salaries have been reduced, Stima Sacco is evaluating their cases and offering them moratorium as they seek other ways of servicing their loans. This also applies to the entrepreneurs whose businesses have been adversely affected by the pandemic. “These members are not paying the principal and interest of their loans during the duration of the pandemic until they are up and running again,” says Hassan. So far, Stima Sacco has issued Kshs. 700 million as moratorium to its members. “The most encouraging thing is that many affected members have started servicing their loans after recovering from the adverse affects of the pandemic and we are optimistic that the situation will normalize in the near future,” observes Hassan.

Road ahead

Stima Sacco is currently on a  growth path. In the next three years, its projection is to have an asset base of Kshs. 75 billion. It is also aiming at growing in the mortgage space by offering a long term product. According to Hassan, this is a low lying fruit since in Kenya, only about 28,000 people have mortgages yet the country has a population of more than 47 million. In addition, it will roll out Sharia products in order to effectively serve the members who are Muslims.

In the same vein, it is going to revamp M-Pawa (its mobile banking platform) so that it can become more versatile.  Finally, it  will  roll out agency banking in various parts of the country in order to complement  the   delivery channels that it is currently using.



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