The World Council of Credit Unions, Inc. (WOCCU) said it is teaming with Strathmore University in Nairobi to develop the Strathmore WOCCU African Management Institute (SWAMI) to provide intensive, in-service training for credit union managers and board members based on the PEARLS operating system.
PEARLS is 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, WOCCU reported.
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 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 in its work around the world 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.
WOCCU noted that 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. According to M'Mithiaru, those include 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.
WOCCU said it believes 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.
