Afya SACCO, a cooperative savings and credit organization, has been grappling with significant performance issues in recent years.
Faced with a shrinking loan book, mass member resignations, an increase in dormant accounts, and severe liquidity problems, the SACCO’s ability to fulfill its core objective of providing loans has been compromised.
The staff’s demoralization and lackluster performance have further exacerbated these challenges.
To address these issues, the SACCO management established a taskforce led by James Ondiek, tasked with devising strategies to stabilize and revitalize the organization.
The taskforce has proposed a comprehensive turnaround plan with short-term, midterm, and long-term strategies.
Short-Term Strategies:
- Restructuring the Finance and Banking Division: Immediate reforms will be made to enhance operational efficiency.
- Implementation of the 2022-2027 Strategic Plan: This plan will be fully adopted to provide a clear roadmap for recovery.
- Freezing Rebates: To bolster operational capacity, the declaration and payment of rebates will be halted for the next three years.
- Suspension of Special Clearance Facility: Recognized as a significant drain on liquidity, this facility will be frozen for approximately one year.
- Branch Relocation: FOSA branches currently situated in hospitals will be moved to more accessible locations to improve member access and increase visibility to potential new members.
Long-Term Strategies:
- Branch Optimization: The SACCO will reduce the number of physical branches while expanding virtual branches to cut costs and increase accessibility.
- Governance Streamlining: The governance structure will be simplified, reducing the number of branches from 103.
- Avoid External Borrowing: Efforts will be made to refrain from external borrowing due to its high cost, with a focus on internal capital generation through a share drive.
The turnaround strategy was formally presented to the SACCO’s CEO Peter Gisembe on August 14, 2024, marking the beginning of a crucial phase for the organization.
The plan aims to restore financial stability, improve operational efficiency, and revitalize membership engagement.
