I take this opportunity to welcome you all to this year’s 41st Annual General Meeting. It gives me great pleasure being with you on this special occasion. The fact that many of you have travelled for long distances is a clear testimony of the importance of the Sacco. Thank you for coming.

Distinguished guests, ladies and gentlemen, the Sacco was established to promote the welfare and economic interests of its members in accordance with the co-operative principles. The Sacco has though not without challenges endeavoured to achieve the above mission as highlighted below.

Sacco Performance

Mentor Sacco aspires to become the leading Sacco in Kenya and beyond by focusing on improved performance, operational efficiency and a stronger capital base. This demands teamwork and active participation of all stakeholders. Currently, Mentor is the Sacco of choice and the financial solution for most people in Murang’a County and beyond.

As adduced in the table below, performance of our Sacco in 2017 was the best in recent years.

Financial Performance 2014 2015 2016 2017
Total assets 3,283953,219 3,926,234,296.45 4,877,108,727.61 6,272,656,284
Total deposits 2,476,141,469 3,007,206,335.00 3,588,473,178.31 4,351,403,521.21
Loans and advances 2,511,315,580 3,150,143,542.11 4,068,599,457.51 5,189,103,210.11
Share capital 51,183,315 57,957,132.00 163,048,132.15 244,898,056.13
Total revenue 486,302,029 557,411,649.18 691,077,003.95 896,320,058.35

During the year under review, mobilization and lending of funds was as vibrant as ever. I am pleased to report that the SACCO revenue increased by 29.7% compared to 14.6 % in 2016, from Kshs. 691.077 million to KShs 896.32 million. The total assets grew by 28.61% compared to 19% in 2016, from 4.877 billion to 6.273 billion. Also, deposits grew by 21.26% compared to 15% in 2016, from Kshs 3.588 billion to 4.351 billion. Loans also grew by 27.54% compared to 25.5% in 2016. Further, the most outstanding is that in the year ending 31st December 2017, the Sacco made a net profit of Ksh. 123.5 million.

The year 2017 performance demonstrates the benefits of focused management strategy and robust business model. I therefore beseech all members to support the board in their effort to steward the Sacco. Let us all be resourceful partners, for such partnership shall enable Mentor to marshal the vast membership and savings existing within the county and beyond. In addition, I urge members to be loyal to the Sacco by patronizing its product so as to meet our operational expenses and better returns to the members.

Total active membership 16,376 Ksh 244,898,056
Fully paid-up members 4,592 (attained Ksh 30,000) Ksh 157,006,883
Amount above minimum paid by 4,592 members Ksh 19,246,883.
Total amount required from 11,784 members Ksh 353,352,000
Partially paid-up (below Ksh 30,000) Ksh 87,891,173
Amount currently unpaid by 11,784 members Ksh 265,628,827

From the figures above, the 4,592 members have subscribed more than the minimum shares by Ksh 19,246,883, while the partial paid up have an unpaid amount of Ksh 265,628,827. If those partially subscribed 11,784 members raise their capital shares to minimum Ksh 30,000, the Sacco can attain its capital ratios as required by law. We should resolve the way forward as the 30th September deadline we promised SASRA approach to escape further worse repercussions.

Death claim fund

The society runs a death claim fund as a society expense and no money is set aside for the activity. The scheme writes-off any loan outstanding at the time of death and the family is given Ksh 20,000 for funeral preparations. The society also refunds twice the deceased members deposits. Claims made during subsequent years are as indicated below. The Sacco insures members’ deposits and loans and premiums are paid to cover the same every year. In the year 2017, over Ksh 34 million was paid, money that could have been available for other activities. With the highly increasing premiums, this program is unsustainable.

  Number of departed members Amount claimed Premiums paid for the year Premiums minus death claims
2014 21 7,171,519 8,290,089 1,118,570
2015 23 9,926,773 13,900,153 3,973,380
2016 34 23,107,059 23,189,563 82,504
2017 37 21,825,249 34,370,594 12,545,345
2018 14 ???? 39,215,842 ????
Total 129 86,246,442 118,966,241 17,719,799

In the year 2017 an excess of over Ksh 12.5 million was paid more than was claimed. This is basically a loss to the Sacco. This year 2018 the insurance has requested for a premium of over Ksh 39 million for death claims.

From 1st January this year to date, 14 of our fellow members have passed on with total loans and shares of Ksh 8.4 million. Kindly, members lets stand up and observe a minute of silence for our departed members.

As you know members, this is the insurance business where you pay more than you would normally claim. Over and above the outright losses, such funds paid as premiums drains funds that could otherwise be used to improve on the capital adequacy ratios through retention and improve the dividend payments

Compliance to SASRA ratios

Capital adequacy ratio is a measure of safety and soundness of the Sacco and is based on members’ deposits and assets which changes in proportion to changes in deposits and assets. In this case, the ratio will keep growing as the Sacco members’ deposits and assets grow. Over the years, the Sacco has witnessed tremendous growth in loans to members. However, this growth has not been replicated in the increase in share capital, as the case should be. Consequently, Mentor like most Saccos has been operating with low prudential ratios which put it at risk of being denied license to operate FOSA. This is evident from earlier warnings by the regulator.

Dear members considering that “a bird in hand is worth two in the bush” the board in their continued desire to serve your best interest had proposed a payout of 15% on share capital, 13.9% on Mazao shares, 12% on Fosa shares, and 11.9% on ordinary deposits. This totalled to over Ksh 448.88 million.

As you all know that the law has no compromise, must and should be obeyed despite the consequences. Upon submission to SASRA for approval, the accounts were returned with the following conditions and I quote…………….. “based on the foregoing we hereby return the accounts for amendment to comply with regulatory ratios...” In compliance to SASRA conditions for approval, the rates were revised as follows 15% on share capital, 12.8% on Mazao shares, 10.9% on Fosa shares, and 10.8% on ordinary deposits. This then totalled to over Ksh 412.15 million, a reduction of Ksh 36.73 million to raise the society’s retained earnings.

Credit risk management

Saccos are supposed to be managed like any other business enterprise. Thus, it is mandatory for Saccos to provide for all non performing loans. Loan default rate imply higher loan loss provisioning and a reduction of funds available for dividends. Therefore it is the duty of all of us to safeguard the interest of the Sacco by ensuring that every loan is properly repaid.

During the year under review, loan default remained a challenge to the SACCO. The number of loan defaulters increased due to growth in membership and consequent loan applicants. In particular, the following are some of the reasons for loan defaulting in the Sacco

• Early retirement
• Interdictions
• Change of salary pay point
• Multiple borrowing
• Delayed remittances

Benefits after Retirement

Retired members are the Sacco heroes. Mentor Sacco understands the value of our senior members in which regard, the Sacco has ensured Retired members continue enjoying products and services like any other member who is still in service. In addition, to ensure our ‘heroes’ are not condemned to a financial crisis, the Sacco advances retired members Ksh. 10,000 every month until they start receiving their monthly pension. We therefore urge our retirees to channel their pension benefits through the Sacco.


Loan guarantorship has become a sensitive issue in the Sacco and the board would like to advise members to be careful when guaranteeing loans. At least one should know the character and workstation of the loan applicant before signing as a guarantor. Also, as a rule, never sign a loan application form that is not fully completed. Remember by signing you are committing yourself to paying the loan in case of default. Therefore, ensure you establish the true identity of the loan applicant, loan type, amount applied and repayment period to know the risk involved in case of default.

Nominee Cards

During the past year, the society has had problems when processing death claims. In some cases, the claimants have been different from the nominees or there were no nominees at all. To avoid any inconveniences during the payment of claims, members are hereby advised to ensure that they have filled the nominee cards. The cards are available in all our branches free of charge and can be updated as need arises.

Member Personal Details

A member identification record is critical for efficient services. To enable us serve you better and promptly you are hereby requested to update your personal details. In addition, you should always advise the Sacco in case of any change. At minimum, all members should ensure the following details are available in the Sacco:

• Full name and current contacts
• Mobile phone number
• ID number
• Employer
• Current work station/school
• Next of kin details

Amendment of society By-laws

Since the last amendments, much has changed in the Sacco operations. In this case we hereby propose an amendment by inserting By-law 38(r) that reads “No member shall be eligible to be elected as a member or elect a member of the Board if his/her permanent residence or place of origin (whichever is prevalent) is not within the designated electoral area as shall be conclusively evidenced in the membership card and register of all Sacco members.”


On behalf of the Board of Directors I would like to once again thank you all in your respective capacities for the support, understanding, enthusiasm, confidence, hard work as well as your contributions towards the attainment of remarkable growth and performance of the Sacco. I am also appealing that you bear with the situation by understanding that the SASRA condition on review of payout was their “irreducible bare minimum” the other option being denied operating licence.

Finally, The Board wishes to express its heartfelt appreciation to our partners and friends in the cooperative movement, i.e.: The Co-operative Bank, Cooperative Insurance Company of Kenya, CAK, KUSCCO, our External Auditors, the county government and several others who may not be with us today. Thank you very much.

Long live Mentor Sacco.

Thank you and God bless you All.