A presentation on investment in co-operatives especially to Saccos (Savings and Credit Co-operative Societies). The main objective of the Saccos is to promote thrift among their members by affording them an opportunity to accumulate their savings and access loans at affordable interest rates. It is therefore prudent for Saccos to invest wisely and according to Co-operatives Societies Act Cap 490.

1. INVESTMENTS BY CO-OP SOCIETIES
AND MEMBERS
By Stephen Mwangi
Mr. Co-operative
@Frenzyied on Twitter

2. ØBack Office Service Activity(BOSA)
üMobilization of savings
üProvision of Credit
ØFront Office Service Activity (FOSA)
üBanking Services
SACCOs’ CORE BUSINESS

3. ∗ Post Office Savings Bank.
∗ Banks licensed under the Banking Act
∗ Companies incorporated in Kenya
∗ Co-operatives Registered under Co-op Act
∗ Stocks of Statutory bodies established in Kenya
∗ Other manner approved by Resolution of a General
Meeting
INVESTMENT OF CO-OP FUNDS
(Co-op Societies Act – Section 45 )

4. Except for own office accommodation:-
∗ Not more than 25% of total share capital
∗ Not more than 20% of equity of investment.
CO-OPS INVESTMENTS IN REAL ESTATE
(Rule 36– Co-op Societies Rules, 2004)

5. ∗Approval of Non-core Business/Project
by Special Resolution of AGM
∗Submission of Feasibility Study to the
Commissioner with AGM Resolution
∗Members Contribution – Not Less than
80% of equity
∗SACCO Contribution – Not More than
20% of equity
SACCOs INVESTMENT IN NON-CORE
BUSINESS

6. ∗ Members 100% contribution in absence of
Society interest in project.
∗ Separate members register for project
participants
∗ Issue of share certificates to participants
∗ Maintenance of separate accounts and books
INVESTMENT IN NON-CORE BUSINESS
Cont’d

7. Formation/ Registration of separate legal entity
vHousing Co-operative Society – Real Estate
vInvestment co-operative society-Invest
vConsumer Co-op Society-Consumables- (Wholesale
Trade,Retail Trade, Distribution Trade, etc)
vPSV Based SACCO-Transport
MEMBER’S AND COOP INVESTMENT
OPPORTUNITIES

8. ∗Sacco Savings Products (BOSA/FOSA)
∗Quoted shares and stocks
∗Treasury Bills and Bonds
MEMBER’S AND COOP INVESTMENT
OPPORTUNITIES Cont’d

9. TREASURY BILLS
• Short Term Borrowing Instruments by the Government
through the CBK to raise money in local currency-usually for
a period not exceeding one year.
• Maturities - 91/182/364 days
• Buyer - must have a bank account
- CDS Account Holder
∗ Minimum face value-Kshs. 100,000
∗ In multiples of Kshs. 50,000
∗
MEMBER’S AND COOP INVESTMENT OPPORTUNITIES Cont’d

10. TREASURY BONDS
∗ Medium to Long Term Debt Instruments issued by the
Government through the CBK to raise money in local
currency - usually for a period of more than one year
∗ Current Issues - 1 to 30 years
∗ Minimum face value - Kshs. 50,000
∗ Issued in multiples of Kshs. 50,000
MEMBER’S AND COOP INVESTMENT OPPORTUNITIES Cont’d

11. UNIT TRUST
∗ A Mutual Fund
∗ A collective investment instituted under a trust
deed (trust deed-a deed of conveyance creating
and setting the conditions of a trust)
∗ A pool of savings by members of the Trust. The
pool is invested by professionals in a selected
number of securities e.g Shares, Cash and
Interest Bearing Instruments.
MEMBER’S AND COOP INVESTMENT OPPORTUNITIES Cont’d

12. MUTUAL FUND
∗ An investment vehicle made up of a pool of funds
from many investors for the purpose of
investing in a selected number of securities e.g
Stocks, Bonds, Money Market etc.
∗ Professionally managed
∗
MEMBER’S AND COOP INVESTMENT OPPORTUNITIES Cont’d

13. MONEY MARKET FUND
∗ Un open ended mutual fund that invests in short term
securities
∗ Low risk investment
∗ High income yield
∗ Immediate liquidity
∗ Withdrawable at short notice
∗ No loss of interest
∗ Interest compounded and re-invested
∗
MEMBER’S AND COOP INVESTMENT OPPORTUNITIES Cont’d

14. EQUITY FUND
üOffers superior returns over the
medium to long term
üInvests mainly in listed companies,
selected quoted shares in NSE.
üHas high risk profile
∗
MEMBER’S AND COOP INVESTMENT
OPPORTUNITIES Cont’d

15. BALANCED FUND
Offers investors reasonable level of current
income and long term capital growth. Funds
invested in quoted local and international
shares and selected interest bearing
investments like bonds, fixed deposits and
commercial papers. Has medium risk profile.
MEMBER’S AND COOP INVESTMENT
OPPORTUNITIES Cont’d

16. FIXED INCOME FUND
Aims at achieving a reasonable
level of current income and
medium stability for capital
invested. Moderate investment
risk.
∗
MEMBER’S AND COOP INVESTMENT OPPORTUNITIES Cont’d

17. Unit Trusts
vMoney Market Fund (CIC – 12.58% P.A)
vFixed Income Fund (CIC – 9.76% P.A)
vEquity Fund (CIC – 14.34% P.A)
vBalanced Fund (CIC – 13.39% P.A)
v
v(Source – Daily Nation (Business)-15th August,
2015)
v
MEMBER’S AND COOP INVESTMENT
OPPORTUNITIES Cont’d

18. Banks/ Financial Institutions
vSavings Accounts
vShort Call Deposit Accounts
vFixed Deposit Accounts
v
∗
MEMBER’S AND COOP INVESTMENT
OPPORTUNITIES Cont’d

19. END