Nairobi, Kenya— World Council of Credit Unions, Inc. (WOCCU) and Strathmore University in Nairobi are teaming up to develop the Strathmore WOCCU African Management Institute (SWAMI) to officially provide intensive, in-service training for credit union managers and board members based on the PEARLS operating system, WOCCU's checklist for credit union success based on measures such as asset quality, liquidity and growth. SWAMI will help ensure that East African Savings and Credit Cooperatives (SACCOs) meet internationally accepted standards of safety and soundness.
At the official SWAMI launch, 60 Kenyan credit union professionals heard presentations by Dr. Brian Branch, chief operating officer and vice president for WOCCU; Benjamin Sogomo, permanent secretary for the Kenyan Ministry of Cooperative Development and Marketing; Anne Cochran, president of the Louisiana Credit Union League (LCUL); professor John Odhiambo, president, Strathmore University; and Mr. Ntoitha M'Mithiaru, chair of the Commission Task Force to draft SACCO Law.
Sogomo, the keynote speaker, expressed strong belief in the importance of the SWAMI training for reducing mismanagement and misdirected business decisions, adding his hope that many managers and board members could benefit from the new initiative. He pledged the support of the Ministry in this effort.
Branch spoke on the specific challenges facing SACCOs and how to overcome them, stressing the need to generate savings as sufficient liquidity for loan demand. As Branch explained, WOCCU has found, worldwide, that savers look for three qualities in a banking institution. In order of importance, they are: strict discipline to protect savings, ease of access to savings and high return on savings. Based on these findings, Branch concluded that the greatest challenge to the SACCO is to create a safe institution in which to attract depositors while offering competitive lines of credit to borrowers.
Highlighting the importance SACCO education and training, Cochran shared her hope that the Nairobi based institute will expand to become a regional institute for SACCO managers and board members."The Louisiana Credit Union League firmly believes in the empowerment of SACCO's managers and board of directors through education. SWAMI will give attendees an inside track to achieving success, while incorporating a commitment to the credit union philosophy as well as having access to top quality education," noted Cochran.
To achieve this aim, new legislation is in the works that will ensure safety and soundness for SACCOs across Kenya. Besides safety and soundness standards, the proposed SACCO Law includes several other provisions to benefit these financial institutions. M'Mithiaru summarized these as follows: expansion of financial services outreach in Kenya, establishment of an independent mechanism for regulatory supervision of SACCOs and the introduction of a savings guarantee mechanism.
Edward Mudibo, managing director of the Kenyan Union of Savings and Credit Cooperatives (KUSCCO) supported the launch initiative and pledged the support of KUSCCO (the national association) and the cooperatives.
The SACCO Law would greatly alleviate many problems common to an unregulated market, including limited product diversity and poor governance and management. The Ministry is also working on the creation of a SACCO Regulatory Agency. All SACCOs must declare assets, liabilities and income on an annual basis.
With SWAMI, the SACCO Law and the SACCO Regulatory Agency, Kenya's SACCOs are quickly moving towards universal standards of quality, safety and soundness that will improve Kenya's economic standing for years to come.
World Council of Credit Unions is the global trade association and development agency for credit unions. World Council promotes the sustainable development of credit unions and other financial cooperatives around the world to empower people through access to high quality and affordable financial services. World Council advocates on behalf of the global credit union system before international organizations and works with national governments to improve legislation and regulation. Its technical assistance programs introduce new tools and technologies to strengthen credit unions' financial performance and increase their outreach.
World Council has implemented more than 290 technical assistance programs in 71 countries. Worldwide, 56,000 credit unions in 101 countries serve 200 million people. Learn more about World Council's impact around the world at www.woccu.org.