MERRY X-MAS FOR SNAT CO-OP MEMBERS

MBABANE – The SNAT Savings and Credit Co-operative (SNAT SACCO) is gearing up to distribute a generous 9.4 per cent dividend to its members.

This will put teachers in a pleasant festive mood as all public servants have recently been awarded a once-off 1 per cent salary increment due this month. This was viewed as a testament to the co-operative’s strong financial performance. This significant payout to the SACCO members was announced during the recent annual general meeting (AGM), where members gathered to review the past year’s achievements and discuss future plans.

Chairperson of the SACCO, Gugu Mabuza, announced that the members would be paid 5 per cent of the value of shares as dividends and 9.4 per cent interest on members’ savings. SNAT Co-op members, including those who have retired, are still able to take loans. On exceptional cases, the SACCO may grant standard loans below the minimum threshold of E20 000, over a 36-month repayment period to retired members and those employed on short-term contracts. The chairperson further proposed that members’ minimum savings be increased from E150 to E200 in July 2024.

She mentioned that this would improve the SACCO’s liquidity and stimulate members’ culture of savings and access to credit facilities. The chairperson further stated that review of standard loan limits from E200 000 resulted in an increased demand for the facility. Such demand had to be controlled in order to ensure that the SACCO manages its liquidity in compliance with the regulatory requirements. The SACCO then employed certain revised conditions for revolving the standard loan. These include that members are eligible to revolve only after paying at least 50 per cent of both the initial loan amount and having paid for half the granted repayment period. Applications that meet these conditions for standard loans will only be processed from the 15th to the last day of the month. During the year under review, the SACCO disbursed a total of E455 696 897 in respect of loans to members, compared to E300 995 733 advanced in the previous year, depicting a rise of 51.4 per cent.

Loans

This was attributed to improved limits of standard loans. Under the same facility of standard loans, a total of E5 214 450 was disbursed to 13 members in the year under review. This reflects a rise of 4.65 per cent and a variance of E231 628 compared to the previous year. Under business loans, E1 382 618 was disbursed to 14 applicants, reflecting a decline of 33.8 per cent. On personal loans, E53 127 367 was disbursed to 3 997 applicants in the year. This reflects a decline of 25.96 per cent, going down by a variance of -E18 624 306 compared to the previous year. The SACOO also has a facility of helpline loans, where a total of E17 019 805 was disbursed to 2 841 members, reflecting a decline of 26.34 per cent. The chairperson highlighted that there were challenges that were faced by the SACCO in the year, including the migration of members to other countries.

Members’ over-indebtedness and inability to qualify for sought credit facilities was also noted. There were also increased membership withdrawals as 186 members terminated membership. Meanwhile, 69 died and 206 joined the SACCO. The chairperson stated that the SACCO is at a transformation stage, which is characterised by several projects and activities. She cited rebranding as one of the core transformation projects and indicated to the membership that the purpose of the project is to make the SACCO appeal to critical stakeholders, such as members, employees, umbrella bodies, regulator, suppliers among others.

She further said the SACCO’s capital adequacy ratio was well managed throughout the financial year, as it was consistently above the minimum threshold of 8 per cent. Same stood at 12.94 per cent at the end of the financial year being reviewed. Members were also told that the development of the SACCO’s Mobile App has started and currently, members are able to view balances. The next stage (upon completion of the data cleaning exercise) would be operationalisation of the app, which will enable members to withdraw and transfer funds within their accounts, the minutes of the meeting state.

Prospering

While SNAT could be prospering on some ends, members were also informed that despite engagement of Remax Estate Agents as property managers, the performance of the line of business has not improved. Mabuza attributed this to inadequate demand for office spaces, following business failures that resulted from the outbreak of COVID-19. The chairperson further stated that the offices are not fully-occupied and that three defaulting tenants were evicted with assets attached and sold on public auction (though owed funds were not fully-recovered), the minutes state.

The members were also told how some SACCO members who migrate to other countries, leave unsettled debts behind. The Board responded by stating that before migration, members apply for credit facilities and later leave without making arrangements for honouring their obligations, which results in poor business performance, less surplus and declaration of unappealing interest rates. Meanwhile, when members were afforded a chance to respond to the reports, some registered concern about the onboarding of teachers employed by private schools as they may expose the SACCO to credit risk upon elapse of the contracts. The Board responded by stating that the SACCO does not onboard same as per requirements of Bylaws. It was further mentioned that the meeting may review and amend this – if members so desire.

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