Nation Sacco defies pandemic to post Sh71.8 million profit

Nation Sacco has defied Covid-19 to post a Sh23 million net profit rise for the year 2020 on higher investment returns.

The sacco's net profits rose from Sh48.7 million in 2019 to Sh71.8 million last year as the cooperative society posted a seven per cent rise in turnover to Sh283 million.

This was boosted by Nation Sacco's income from investment which increased from Sh41 million to Sh61 million.

But shareholders will now get dividends of 15 per cent on share capital, down from the 20 per cent given out to investors in 2019 while deposits will earn interests of 8 per cent, also down from 9 per cent interest paid on members' deposits in the previous year.

The sacco will now pay a total of Sh114 million in interest to members this year, down from Sh126 million they received in 2019.

Nation Sacco board chairman Peter Munaita said the lower pay outs will help the sacco to withstand the effects of Covid-19 pandemic in the short term.

But the sacco's total assets and deposits both increased by 13 per cent to Sh2.2 billion and S1.7 billion respectively, while its loan book rose by 3 per cent to Sh1.54 billion while the amount it sunk into investments rose by 45 per cent to Sh708 million on reduced borrowing by members.

Mr Munaita said the business has shown its flexibility after withstanding and shaking off market shocks from the pandemic and will look to grow further as the economy rebounds.

"Our society faced a constant challenge to keep growing in the face of retrenchments, salary cuts and business failures occasioned by the pandemic. The Board of Directors initiated a number of measures sanctioned by the Sacco Societies Regulatory Authority (SASRA) to reduce the financial strain for members while ensuring the business objectives were realised," Mr Munaita said. 

He added: "Among these was restructuring of a fifth of our portfolio and temporary relief on loan repayment for members whose incomes were adversely affected. Lending to members decelerated in line with reduced economic activities across most sectors."