It’s Saturday afternoon around 2 o'clock, and I’m preparing for my first annual general meeting as chairman. The venue is our largest packing shed. Forest tables have given way to over 1,500 chairs, neatly arranged in rows. The venue is already just about filled to the brim when I enter. There is a lot of singing going on in the run-up to the AGM, the rental sound system and microphone have been tested extensively, and the party is already well underway.
This is the eighth time I’m attending the AGM of our SACCO, which has seen quite some growth over the last few years. It always gives me pause to see so many people together, so many happy faces. There is always that realisation that we are doing so much more than just grow a bunch of flowers.
In Kenya, it is good practice for a somewhat larger company to have a SACCO, which stands for Savings and Credit Cooperative. It’s an internal cooperative bank, so to speak, run for and by employees, often with assistance from within the company. Employees can save there directly from their paychecks, take out loans and repay them from their wages. Most of the savings are converted into loans to each other, while the remainder is invested safely.
SACCOs are extremely popular in Kenya, compared to domestic banks. Where a regular bank might easily charge more than 18% interest on a loan, a SACCO often lends for a lot less; our rate is 12%. And since it is a cooperative, any profits are paid out as dividends at the end of the year. This makes borrowing very favourable, so that 75 percent of our staff have joined our SACCO.
11% dividend rate
Indeed, the SACCO has done well again this year. When I announced this year’s 11% dividend rate, it brought the house down, with 1,500 people jumping up from their seats. That touches me.
It’s a cooperative the way it was meant to be: operated for and by each other, whereby the whole is greater than the sum of its parts. We RFH members could learn a thing or two from this. How often do we still act in the best interests of the cooperative these days? If there is even the slightest possibility of earning 0.5 percent more elsewhere, RFH gets bypassed. While this is perfectly understandable in these difficult times and even acceptable as long as the rules allow it, it means that it is time to introduce strict rules of play, along with benefits for members who act in the best interest of the cooperative.
