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Case Study Of Sacco

Decent Essays
1.1.1 Growth of SACCOs

Over the past four decades, Sacco’s have been especially vibrant in rural areas since the banks left a gap when they withdraw from service provision to the poor or middle class people of the rural. In 1975, rural Sacco’s membership was 500,000 and this has grown to 1.2 million in 2005. In this period, Sacco’s were primary closed cooperatives dealing only with active members of specific organizations with a common bond. Larger Saccos have opened up to non-member clients by stablishing FOSA while others still continue to offer limited services to members only. This offers a broader range of financial services to both members and non-members. Larger Sacco’s in terms of capital base began offering FOSA’s in their head during the economic liberation period of 1990’s when commercial banks withdrew their services from less viable areas. Hence the FOSA’s attract former bank customers who were left without any banking
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Cooperatives planning include preparation of annual budgets, which are approved during the annual general meeting by members. After budget preparation, different cost centres are allocated funds by members present. The management usually over looks such plans with little or no consequences.

Cooperative societies enhance its growth through well trained management who understand their role effectively. The management of societies is determined by the democratic nature of governance in cooperative societies and the members elect the management committee for a specific term. The problem comes up when the people elected are not good managers and end up running down the societies or mismanages the Sacco funds (Mudibo 2009). He continues to say that; majority of the problems bedevilling co-operatives arise from bad governance and poor economic management or
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