In a special delegates meeting, Imarika Sacco’s leadership outlined an optimistic forecast for the Sacco’s growth over the next two years, revealing a strategic vision that aims to align with Kenya’s shifting economic landscape. According to the report presented during the meeting, Imarika Sacco expects notable expansion across its key financial metrics through 2025, along with a renewed commitment to digital transformation, product diversification, and operational efficiency.
Financial Projections for 2024 and 2025
The committee report projects Imarika Sacco’s long-term deposits and loans will each grow by 13%, while overall turnover is expected to increase by 9.5% by the end of 2025. Members of the Sacco are set to benefit directly, with consolidated returns anticipated to rise by 49%. However, the Sacco also anticipates a 14% increase in non-earning assets, primarily driven by additional capital expenditures aimed at bolstering operational support.
One critical area of focus is loan loss provision, which is projected to increase by Ksh. 45 million, reflecting a 6% rise. To address this, the sacco has intensified efforts to maintain a portfolio-at-risk (PAR) ratio close to the target of 5%. The ladership further recommended revisiting the Sacco’s loan recovery strategy to bring the current rate of 6.9%, recorded as of September 2024, closer to the target threshold.
In response to an evolving financial and technological landscape, Imarika Sacco recently revised its 2022-2026 strategic plan following a midterm review. The revised strategy emphasizes five key pillars: Digital Transformation, Product Diversification, Operational Improvements, Partnership and Innovation, and Governance Enhancement. Key areas addressed in the revised strategy include:
Membership and Products: With a renewed focus on digital member recruitment, Imarika aims to expand its product portfolio, introducing e-loans, agribusiness loans, and mortgage financing to appeal to a broader demographic.
Operational Efficiency: The Sacco plans to accelerate its transition to digital services, streamline internal processes, and integrate member feedback to enhance service delivery.
Governance and Leadership: It’s leadership is focusing on stronger governance measures, including enhanced risk management, audit compliance, and training to navigate emerging challenges.
Human Resources: Skills development in digital services, customer relations, and performance management will be prioritized to support a growing membership base.
Imarika Sacco set ambitious performance indicators, targeting a membership base of 216,789 by 2026 and aiming to increase its service delivery index to 85%. Additionally, the Sacco projects a reduction in its operational cost-to-revenue ratio from 37% to 35%, a loan book expansion to Ksh. 14.5 billion, and savings deposits growth to Ksh. 15.8 billion by 2026.
Imarika Sacco Chairman Jonh Ziro commented on Kenya’s recent economic resilience, noting a 5.6% GDP growth in 2023, up from 4.9% in 2022. The growth momentum has continued into 2024, supported by a robust service sector and favorable agricultural conditions driven by government interventions and conducive weather. Despite this growth, rising interest rates, fueled by tight monetary policies, have impacted the lending market, contributing to a dip in loan uptake.
Ziro acknowledged challenges in loan uptake, which could potentially hinder the Sacco’s asset growth. However, he expressed confidence in achieving the Sacco’s 2024 turnover targets and anticipates surpassing the set share capital goal by Ksh. 53.5 million, achieving a total of Ksh. 969.5 million. Liquidity ratios are also expected to close at 18%, above the recommended 15% minimum.
Hon. Clara Chonga, Kilifi County’s Executive Member of Trade, Development, and Tourism, who served as the chief guest, commended Imarika Sacco for its role in uniting members and driving economic empowerment. Clara highlighted the Sacco’s contribution to the growth of small and micro-enterprises within the county, emphasizing that the cooperative movement thrives on values of good governance, transparency, and accountability.
Clara encouraged Imarika Sacco to continue its technological investments, which she described as essential for future growth.
“As a county government, we will continue working closely with you, as our main mandate is to strengthen the cooperative movement through the creation of a conducive environment, and Imarika, you are our big supporter,” she remarked.
In line with its commitment to member education, Imarika Sacco conducted a training program between June and August 2024, with participation from over 16,000 members. Through these sessions, members were sensitized on capitalizing dividends as part of core capital, reinforcing the Sacco’s emphasis on financial literacy.
With advances in its strategic initiatives, Imarika looks poised to play a pivotal role in Kenya’s economic recovery and growth. Through its vision and commitment to innovation and member empowerment, the Sacco continues to set benchmarks in Kenya’s cooperative sector.
