By Duncan Mlanjira
FINCOOP was the biggest Savings & Credit Cooperatives (SACCO) in Malawi around 2010 in terms of membership, which was over 40,000 then and assets of over K600 million, but due to high delinquency through agricultural loans, FINCOOP almost collapsed with members going down to less than 6,000 and assets written off to almost half.
However, through the network of SACCOs under Malawi Union of Savings & Credit Cooperatives (MUSCCO), FINCOOP was given a stabilisation fund to keep operating and now it is on its way full recovery have been making surpluses in the last three years.
Mbeza, FINCOOP vice-president
Robert Mbeza, an internationally recognized professional in the cooperative industry with 36 years of experience (since 1983), was appointed as FINCOOP’s vice-president, to assist with providing strategic direction and oversight of its activities.
“Membership is growing now, standing at over 12,000 with 2,000 members joining in the last two months,” Mbeza said.
“FINCOOP is not only focusing on recovery, it is pushing for membership, targeting the mainly the unbanked to push for financial inclusion.
“We have an open common bond, meaning everyone can join — employees, entrepreneurs, market vendors (we have a branch inside Kawale Market in Lilongwe), farmers, village banks, Village Savings and Loans Associations (VSLAs), anyone who has capacity to save.
FINCOOP board and senior management
“The criteria for members to join is by paying a membership fee of K1,000 and non-refundable shares of K10,500.
“We have projects targeting Micro, Small to Medium Enterprises (MSMEs) and Small to Medium Enterprises (SMEs), village banks, VSLAs, salary workers across the country.
“We have many products including Solar Home Systems that our members are buying on loan for home lighting and some of our rural community members have even started businesses of charging phones in their communities.
A strategic planning meeting
“We also have solar systems that come with TVs and these we are mainly targeting employees in the rural areas.
“We have recently introduced motorcycle loans targeting those MSMEs in transport business. These and many other products are making FINCOOP to recover and we know we will get back to where we belonged — top of the SACCO movement in Malawi soon.
MUSCCO Chief Executive Officer Fumbani Nyangulu agrees with Mbeza that if FINCOOP had not been put under administration after reporting poor financial performance which was due to huge loan write-offs between years 2008 and 2010, it would have collapsed completely.
Member mobilization
“The poor financial performance resulted in a huge loss that eroded the equity forcing the regulator to take the administrative measure.
“A recovery plan was agreed upon with the regulator and from year 2011 to date, FINCOOP financial performance has been improving to the effect that from last year it is posting surpluses on monthly basis.
“The SACCO is projected to start meeting all regulatory standards within a period of five years. The positive thing to talk about is that the SACCO’s liquidity position keeps increasing and it is able to service its members adequately.
Celebrating world SACCO Day
“MUSCCO and the Registrar of Financial Institutions are both happy with the SACCOs recovery and performance to date.
Nyangulu also agrees with Mbeza that joining FINCOOP SACCO, is easy as interested clients can just walk into any of their branches and fill a form to open a shares and deposit accounts and then start saving.
“After 3 months of saving, one is allowed to start accessing loans based on the policy.
FINCOOP branches in Lilongwe are in MUSCCO Building, Mandala Road (Area 3) and Kawale market as well as in in Mzuzu and Blantyre.