Annual Reports

Chairman's Report - SACCOL AGM 2009

COASTLANDS CONVENTION CENTRE
DURBAN, KWAZULU NATAL

1.0 Introduction

Ladies and Gentlemen

It is once again my singular honor to welcome all of you to our Annual General Meeting here in the KwaZulu Natal Province.

As a SACCOL, we felt that it would be a great opportunity for us and the province to have our AGM in this province. We were inspired by the province initiative to host a very successful International Co-operatives Conference, which was in fact hosted by the Department of Economic Development earlier this year. On that note, allow me ladies and gentlemen to congratulate the co-operative wing of the Department of Economic Development for a very fruitful and a successful co-operative conference. After that beautiful conference I could not help thinking that South Africa is now ready to host the World Council of Credit Union Conference, which is one of the greatest world events in the Savings and Credit Co-operative movement.

So I want to give a challenge to all the relevant departments that deal with co-operatives to give this a good thought. The ICC has written to SACCOL expressing an interest to partner with co-operatives to host this world event in say 2015.

In the last international co-operative conference it came out clear that the agenda for co-operatives in this province is amongst priority issues and as an apex body for Savings and Credit Co-operative, we strongly believe that we have a lot to offer, hence our wish for a working partnership.

Allow me ladies and gentlemen to first welcome everybody that forms part of this meeting. A special welcome goes to those of our members who are coming to this meeting for the first time. We would like to thank you for becoming part of SACCOL’s happy family of “People Helping People†and we look forward to a long and sustainable relationship with you.

May I also express our sincere appreciation to our keynote speaker, Ms. Sharda Naidoo, the Managing Director of the Co-operative Banks Development Agency who has agreed to take time off her very busy schedule to grace this occasion. To us this is a business meeting where we discuss issues of importance with our members as well as a thermometer for checking if we are still discharging our mandate as requested by members.

Whilst we do that, we want to establish a strong relationship with the Co-operatives Banks Development agency since we both have a common goal to assist our people to co-operative out of poverty. Please know Madam Managing Director that the establishment of this Agency brings a lot of hope to this movement that has barely survived under the leadership of SACCOL and we look forward to a good relationship.

2.0 Economic Overview

This past year our economy was characterized by difficult trading conditions whose negative impact did not spare the co-operative movement.  These were partly a result of the global economic crisis, which affected not only SACCOs in South Africa but also other financial services organization globally.  WOCCU, our apex body made a study of the impact globally and we still await formal results of the survey that we hope to share with all of you. During the year the country went through an economic turbulence that resulted in numerous changes in interest rates.

This affected saving and spending power of most of our members and as a result, our co-operatives were highly affected. We are happy to see those interest rates starting to decline and we hope that as that trend continues, our SACCOs will get a breather and the savings will increase again.

On that note as a League, we would like to request our SACCO manager to keep a close eye on these economic changes so that they can advise their boards on appropriate measures to be taken on time.

3.0 Legislation

Ladies and Gentlemen:

The Co-operative Bank Act was passed by parliament in February 2008. As many of you would know, this legislation gave birth to the Co-operatives Banks Development Agency. We are very pleased today to know that the Agency has been established. We have seen a lot of activities that are being facilitated through the agency, which includes the appointment of the board, the appointment of key staff members like the managing director and the supervisor. We have noted that the regulations have now been published for public comment. To us this is a sign of progress. On that note ladies and gentlemen I do hope that the Managing Director will introduce to us those of her board members that are here with us. May I take this opportunity to congratulate Mr. Sifiso Ndwandwe who is the first ever chairperson of the CBDA. Mrs. Sharda Naidoo again the first Managing Director of the CBDA and of course Mr. David de Jong, the Supervisor of the Co-operatives Banks.

As SACCOL, we want to assure you of our support to the Agency and we look forward to work with you as a service provider. We know that the tools that we have developed over the years will come handy to the Agency.

4.0 Provincial Presence

Madam Managing Director, we are very proud to say that this is our twelfth Annual General Meeting and we are happy to share it with you. As a practice, we hold annual General meetings on a rotational basis in provinces where we have representation.

So far we have representation in Gauteng where we have an office in Johannesburg, in the Western Cape, in the Eastern Cape, We are currently working towards establishing two more offices in KwaZulu Natal and Mpumalanga. These offices have played a very important role to assist co-operative in the provinces

5.0 Co-operative banks

We have been made aware that one of the activities of the CBDA will be to hand pick those SACCOs that qualify to be co-operative banks.

According to the Act the SACCOs must have achieved a collection of deposit from a minimum of R 1 million and be serving a membership base of 200 or more members. At a glance, these numbers look very difficult to achieve, however as a league we are confident that each and every one of our members will be able to achieve the threshold in a record time. On that note ladies and gentlemen I am very proud to announce that 10 of our SACCOs meet these requirements and accordingly they will duly register as our first co-operative banks. These are: -

  • Alrode SACCO
  • Ditsobotla SACCO
  • Sibanye Cape SACCO
  • Nehawu SACCO
  • Kleinfontein SACCO
  • Webbers SACCO
  • SAMWU SACCO
  • Mayibuye SACCO
  • Orenjekas SACCO
  • CFF

This however leaves SACCOL with a big challenge to work very hard to develop the other SACCOs that have not as yet met the threshold and ensure that they do. To achieve this, Mr. Chairperson, we will put together programmes that will assist the SACCOs to grow their membership and deposits in record time so that they can accordingly be licensed. We are hopeful that we will work with the Agency achieve this.

6.0 Updating Of SACCOL Statutes

With all the changes in legislation, SACCOL had to go through a process of updating its own statutes. Later on we will be bringing amendments to our constitution for your adoption. We have noted though that there will be no major changes in the constitution.

7.0 Performance Of SACCOs

The general performance of SACCOs during the year was not impressive. A lot of our SACCOs were not able to make profits some as a result of the economic situation and others because of lack of innovation.  Ladies and gentlemen, we need to look at these co-operatives as our means to wealth and as business entities. We cannot keep doing the same things everyday as board members and expect to get different results. Loses have a potential to tempt SACCOs to use members funds to finance operations.

We therefore would encourage members to work very hard to make enough profits to be able to finance their running costs. 

8.0 Compliance Reports

The office has made the board aware that some of our SACCOs are not sending their compliance reports. Ladies and gentlemen please note that these reports are very important for the office to analyze trends in the movement to be able to come up with remedial action where necessary.

I want to plead with you to please ensure that compliance reports are sent on time. Auditors have noted this as a discrepancy since these reports are also used to verify the share capital of SACCOs.

9.0 Umsobomvu Youth Fund Project.

We are very happy again ladies and gentlemen to announce that Umsobomvu has given assistance in a form of a loan and grant to establish co-operatives in KwaZulu Natal and Mpumalanga. As many of you have seen through Masithethe, SACCOs are expected to apply from SACCOL for entrepreneurial funds to finance their members to start businesses and create employment.

This is very important for poverty alleviation and as such members are encouraged to take advantage of this opportunity. Members that have already existing CFF loans will also be allowed to access the Umsobomvu loans. The General Manager will articulate for you how this project will be rolled out.

May I take this opportunity to express our gratitude to Umsobomvu Youth Fund for their continued support to co-operatives.

10.0 Financial Perfomance

During the year under review, the SACCOL had its own challenges. This has resulted once again to a trading loss, as you will see when we present the financial statement.

11.0  Quarterly Board Meetings

Ladies and Gentlemen:

The Board continues to hold quarterly meeting and teleconference meetings to discuss matters of the movement. The past year was a challenge as a result of financial constraints. We want to report that we were not able to have meetings every quarter in all the quarters. However we did have teleconferences to make up for the time when we were not able to hold meetings. We hope that the coming year will offer better economic conditions so that we can be able to hold our board meetings as we are expected to.

12.0  SACCA CONGRESS 2008

Ladies and Gentlemen, may I take this opportunity to thank all those SACCO members that were able to attend the SACCA congress held in Gambia. Those that went will agree with me that the trip was an experience; it was long and very tiring.

On that note I further want to report that a few of our managers completed their managers certification program that was conducted by WOCCU. Two of those managers had their graduation in Barcelona Spain during the WOCCU congress.

We further want to inform you that WOCCU has announced that it will not be able to assist African SACCOs to do the congress this year. This has made it difficult to know if the congress will take place. ACCOSCCA has however expressed an interest to host this event. We await further correspondence. Members will be informed in due course of the progress about this issue

 13.0 RETIREMENT

Today ladies and gentlemen, my term of office comes to an end. According to the statutes I am due for retirement having completed two consecutive terms as a board member. I want to take this opportunity to thank all my fellow board members for the spirit of co-operation they showed during the year. I want to also thank especially those members of the committee that are retiring with me today. I do hope that they will still make themselves available to the movement to share their experiences to take the movement forward. As a movement we a long journey ahead and we need everybody’s input.

14.0 Board Vacant Potions

This year we will have a total of 4 vacant positions in the Board as the terms of two members Mr. Patson Ngwevela and Mr. Elias Mathebula have ended. The vice chairperson was not nominated to be a board member in his SACCO and according to our constitution if he ceases to be a board member of his SACCO his position with SACCOL Board has to be declared vacant. As a result of that, his position is vacant.

We further wish to report that of one our board members Mr. Thembile Mnyakama (Ditsobotla SACCO) was not able to attend any meeting this past year. As a result of that according to our constitution his position has to be declared vacant and he will have to be replaced. This brings the number of vacant positions 4.

I want to wish you well as you proceed with your nomination for new board members and further urge you take this responsibility very seriously because leadership in the Association is of paramount importance and as such we need dedicated and competent leaders to fill these vacant positions. Allow me ladies and gentlemen to express my sincere gratitude to all the members of the board for the hard work they have put to ensure that this movement continues to grow. As you know this work is voluntary and needs a lot of passion. The present members of the board worked very hard

15.0            Conclusion

To conclude, ladies and gentlemen, I once again wish to remind you that the survival of SACCOL depends entirely on you. I do want to urge you to pay all you SACCOL bills on time. A number of people have not been paying for CUBIS, funeral, credit life, dues and dues. This negatively affects the league’s service delivery.

I finally wish to thank all the people that made presentations yesterday during our open day and I am sure that a lot of people benefited from them. To the people of KZN we want to say that we are very handy. We actually have solutions to most of your problems and all we are asking you is to contact us when you need help. Our interest is to grow a strong movement in South Africa that will assist our poor people and the unbanked.

I THANK YOU          

Patson M Ngwevela
SACCOL Chairperson

General Managers Report - March 2009

1.0 Introduction

The Year under review was very challenging as a result of unfavourable economic conditions, financial constraints for SACCOL and the SACCOs and a very difficult operating environment. SACCO performed very badly with a lot not able to make profits and a few not able to continue operating. The Eastern Cape was highly affected with about four of the SACCOS not performing well. Two of the SACCOs in Gauteng also ceased operations

2.0    Executive Overview

The last Annual General managers report was tabled in July 2008 at Willow Park since then the key issues during the year were:-

2.1 The seven SACCOL strategic issues namely

      • Membership Growth
      • Building Financial Stability and Self Sufficient
      • Building Board and Staff Capacity both at SACCOL/ SACCO
      • Reduction of Staff Turn Over
      • Getting Access to Payroll Deduction Facility
      • Improvement Service Delivery to Members

2.2 SACCOL fund raising activities

2.3 The Co-operatives banks Development Agency

2.4 Umsobomvu Youth Fund Project

2.5 Staff issue

 
3.0    AFFILIATION

3.1 WOCCU

SACCOL continues to pay her dues to the World council of Credit Union and continues to get support. During the year under review, WOCCU offered scholarships to two people to a one-week training programme called the Development Education programme fully sponsored by WOCCU. The two people selected to attend were one SACCOL staff member, the training and development Manager – Juan de Lora and one manager of a SACCO, Veronica Padi from Ditsobotla. They are both in the United States of America. We are hopeful that this programme will continue in the future and more SACCO managers will benefit.

An invitation was also received from WOCCU for attendance to the World Credit Unionconference held in Barcelona Spain from 26th to 29th July 2009. SACCOL was not able to send anyone to attend because of financial constraints. However two managers from two of our SACCOs managed to attend the conference. We want to thank the board members of the two SACCOs for the empowerment they are giving to their managers and we hope that the managers will make the expected difference to their SACCOs.

3.2 SACCA Congress

The SACCA congress for 2008 was held at The Gambia in October 2008. SACCOL did not attend the SACCO congress Gambia as a result of the lack of finances.

For 2009 WOCCU reported that they will not be giving financial assistance to Africa to host the SACCA congress. The Congress was supposed to be held in Uganda as per the resolution in Gambia Last year. ACCOSCA is however looking at possibilities to host the congress in October. Further information regarding the congress will be supplied in due course.

3.3 Southern African National Association of Savings and credit Cooperatives (SANASCCO)               

The SANASCCO was supposed to hold its annual meeting in Zambia in May 2009. Once again member countries were not able to attend due to financial constraints.

          3.4 NCASA.

SACCOL continues to represent SACCOs in the National Association Co-operatives association of South Africa. Events that the association did include, strategic plan, engaging the department of trade with regards the co-operative strategy and also representing co-operatives at NEDLAC. There are plans to restructure the organisation in the future

4.0    REPRESENATION

4.1 Reserve Bank.

According to the Co-operatives Banks Act, The Reserve Bank will be responsible for the regulations of co-operatives that have deposits in excess of R 20 million. In order to do that, the Reserve Bank appointed a Supervisor to do perform that function. That Supervisor will be working hand in hand with the supervisor employed by the Development agency regulating the small co-operative banks.

4.2 NEDLAC

Mr Patson Ngwevela and Musa Mbingo were both appointed to sit in the Public Finance Monetary Policy Chamber at NADLAC. They have both attended two meetings. The Chamber discusses all matters of policy that affect government. The different constituencies that are involved are Labour, Government and community. All of which are represented in the chamber.
             

            4.3 BANKSETA

The bank SETA has allocated an amount of R 50 000 to SACCOL to conduct training for masters, post graduate and executive studies for SACCOL staff. Staff members have been asked to look for courses that will be relevant to the work they are doing for funding by BANK SETA. The General Manager and the Training and Development Manager are both training on management using the funds. Other staff members are still looking for institutions where they can enrol for training.

5.0 FUNDRAISING

The office continues to look for funding to finance operations and activities of the SACCOL. Different agencies have been approached together with government agencies that work with co-operatives to have collaborations and to assist them in developing co-operatives in their provinces. Some of the government approached are:-

5.1 Provincial Governments

    1. Department of Economic development- Mpumalanga.
    2. Department of Economic development and tourism – Eastern Cape
    3. Department of Economic Development – KZN
    4. Umsobomvu Youth Fund

Umsobomvu approved our proposal to give SACCOL a total of R5 million out of which R 4 million will be a grant fund to develop SACCOs in KZN and Mpumalanga and R 1million for on lending. SACCOL is to perform on the following deliverables: -

    1. Promotion of SACCOs
    2. Three youth and women SACCOs
    3. Set up 2 provincial offices in KZN and Mpumalanga
    4. Set up a total of 6 SACCOs in the 2 provinces

5.2       Other Agencies

    1. Limpopo Business Support Agency (LIBSA):
    2. Thina Sinakho
           

6.0 CORPORATE PROFILE

6.1 PR/MARKETING

Newsletters: SACCOL has not been able to produce the quarterly magazine Masithethe because of understaffing and funds. It is hoped though that in the coming year there will be funds to produce Masithethe... A half-year release will be made and an Annual report will be produced at the end of the year. This will be a SACCO magazine not a SACCOL magazine, so SACCOs will be requested to submit articles.

SACCOL website has been redesigned and now awaits uploading and launching. The funds to do this were provided by Umsobomvu Youth Fund.

 

7.0    STAFFING

7.1 DEATH OF A STAFF MEMBER

As the chairperson has reported, in the month of July a long serving staff member of SACCOL, Nosiba Cuba who was our receptionist passed away in a car accident on her way from a funeral in the Eastern Cape. She has still not been replaced.

7.2 STAFF RESIGNATIONS

During the year under review one staff member resigned from SACCOL. Ms. Veronica Adriaanse who was an administrator resigned to take up a position in Government. A process to replace her is almost complete.

The staff compliment is now as follows: -

  • General Manager: Musa Mbingo
  • Financial Manager: Ali Behardien
  • Administrator: Vacant
  • Training and Dev Manager: Juan de Lora.                                          
  • Development officer: Mrs Shirley Mathabathe
  • Financial officer: Jabulani Gabela

8.0    SACCO DEVELOPMENT

8.1 SACCO growth

During the year under SACCOL approved the following SACCOs as provisional members of SACCOL.

(a) Ekurhuleni SACCO.

Operating in the Ekurhuleni metropolitan, supported by the Chamber of Commerce. Their common bond is people from the Ekurhuleni Metropolitan who are members of the Chamber.

(b) Flash Savings and credit Co-operative

The SACCO is based in Western Cape. Their common Bond is   take-it-eezi vendors, and members of their families. Take- it-eezi empowers entrepreneurs in rural areas and supply electricity, airtime and small goods for them to sell in rural areas. It has over 20,000 vendors in South Africa mostly in the Western Cape, Eastern Cape, North West and Gauteng. Flash has over 300 members so far.

(c) Orenjekas SACCO

This SACCO is based in Gauteng. The common bond is all employees, family members and customers of Huis van Oranjekas

A breakdown of registered membership looks as follows:

 

 March 2009 March 2008

 

 Urban Peri Rural Total Urban Peri Rural Total
Full members 11 5 9 24 10 5 9 24
Provisional members 4 3 13 20 4 2 13 19
Paying members 15 8 22 45 14 7 22 43

 

Some of the registered members of SACCOL are no longer operating because of challenges with their members who are no longer saving. Most of them need to be assisted financially and be placed under SACCOL administration until they are sustainable again. These are:

1.   Ya Rona SACCO – North West
2.   Midrand Eco City SACCO – Gauteng
3.   Xhora SACCO – Eastern Cape
4.   Ziboneleni SACCO – Eastern Cape
5.   OR Tambo SACCO – Eastern Cape
6.   Amandla SACCO – Eastern Cape
7.   Thohoyando SACCO – Limpopo
8.   Ragwadi SACCO – Limpopo
9.   Ndalama SACCO – Limpopo

8.2 Membership and provincial membership

Membership and loans also grew during the year. The growth is summarised below as follows: -

  2004 2005 2006 2007 2008 2009
Members 9,818 11,956 12,608 13,332 13858 14741
Western Cape 2,253 2,516 2,665 2,817 2828 3308
NorthWest 574 693 1,028 1,077 1147 1330
Gauteng 2,550 2,829 2,422 2,630 2613 2902
Eastern Cape 1,750 1,225 1,441 1,638 1869 496
KwaZulu 607 1,242 856 400 272 272
Northern Cape 146 160 181 181 181 181
Mpumalanga 9 279 482 1,233 1768 2558
Limpopo 0 332 519 488 608 610
National 1,929 2,680 3,014 2,868 2672 3084
Loans 21,204,498 24,426,342 34,536,722 48,197,025 56,931,520 66,606,249
Western Cape 4,503,510 4,156,000 4,370,395 4,283,459 4,113,469 5,636,121
NorthWest 3,237,116 3,950,000 3,830,409 4,051,339 4,586,561 5,758,309
Gauteng 7,520,225 9,712,000 16,984,812 21,936,803 28,364,205 32,503,874
Eastern Cape 1,592,154 1,252,242 1,646,328 1,906,851 2,063,872 2,734,658
KwaZulu 892,775 1,000,000 1,312,208 872,724 1,240,146 1,240,146
Northern Cape 2,411,258 3,000,000 3,830,277 11,148,557 12,588,793 12,588,793
Mpumalanga 47,460 6,100 4,509 14,815 11,701 12,157
Limpopo 0 0 140,723 272,771 384,518 344,794
National 1,000,000 1,350,000 2,417,061 3,709,706 3,578,255 5,787,397

 

9.0    Services

SACCOL services to SACCOs have not changed. SACCOL provides to its members a range of technical, training and capacity building services as well as practical tools to run and operate SACCOs. The SACCOL Development officers and Training Officer primarily carry out this work.

9.1 Board of Director Training

In the current year, SACCOL will spend most of her time in training board members on the modules so that they are fit and proper. A programme of training by province will be released to SACCOs. SACCOs are requested to support this programme so that it is sustainable because it is very important for the SACCOs.

9.2 National and International Training workshops

During the year under review, there was no national training workshop for managers. SACCOL participated at a manager’s workshop that was held in Swaziland. The turnout was not impressive because only 4 managers attended the training. However the training was very good with participants from Botswana, Malawi, Swaziland, Mozambique, and South Africa.

9.3 BankSETA vouchers are still available for SACCO staff members to cash and train on short course offered by BankSETA accredited service providers.  SACCOs are requested to make use these vouchers.

9.4 Provincial Forums

Provincial forums were held in the Western Cape and in the Eastern Cape. There were none in the Gauteng and North West.

10.0 Value added services

10.1 Cubis.

Cubis is still the primary software our SACCOs are using and for which SACCOL provides front line support. During the year under review, only 4 SACCOs paid their licence fees. This is creating problems for the movement because Fern, the provider of the software has threatened to pull out of South Africa because of unpaid licence fees. SACCOL has followed up SACCOs to pay for the licence fees but SACCOs are not paying. SACCOs have to re-commit themselves on the alliance with CUBIS and then make prompt payments.

One of our SACCOs has refused to pay for CUBIS for the reason that the SACCO auditors have discredited the program, saying it was under developed. He has suggested that we consider looking for software.

10.2 Credit Life Scheme

Some of our SACCOs who are using the credit life scheme do not pay their premiums. This is making it difficult to run the scheme yet it is so important. SACCOs are requested to submit premiums and on time.

As at the end of March 2009 the fund looks as follows

Premium paid into the fund up to : R 303, 434
Contributions to the Pool up to March 2009 : R 171, 138
Claims paid out to date up to May 2007 : R 116, 471
Administrative fee up : R   55, 009
Portion allocated to reserve fund : R   18, 336
Funds available for distribution : R 284, 757
Outstanding claims (up to March) : R 176, 213
   
Available Funds  : R 108, 544

                        
      
Most SACCOs stopped contributing to the fund and there were hardly any funds to pay for claims. SACCOs need to make a decision whether they want to support the fund or the fund be stopped.

11.0 PERFOMANCE ON THE STRATEGIC ISSUES

SACCOL activities for the next three years are supposed to be driven by the strategic plan with strategic issues as the chairperson has presented them. The progress on the strategic issues is as follows

  • Membership Growth

Membership growth was experienced both the growth was not as high as we expected. The membership grew by 6.37% from

  • Building financial stability and self sufficiency

 We still have a lot of work to do. We are still not self-sustainable. We have a potential to raise funds from provincial governments, municipalities and other agents.  We also have to develop products that will bring income like training, and assisting SACCOs with compliance matters.

  • Building Board and staff capacity

Staff members are being trained through funds from BankSETA, and other agencies. SACCOL has also sent a staff member to Kenya. The board has not really had much training. It will be addressed in the coming year

  • Reducing staff turnover

During the year under review only one staff member resigned and one passed away. Five positions will be filled this year. Four of the positions are funded through the Umsobomvu project. These are two development officer and two compliance officers. The fifth position will be the Secretary/receptionist.

  • Getting access to payroll deduction facility

The National treasury is working on this issue.

  • Improving service delivery.

 With the filling up of the vacant position we are confident that we will be able to offer good service to our members. The lack of good service was to a great extent a result of under staffing and financial constraints.

12.0 Umsobomvu Youth Fund Project.

The Umsobomvu Youth Fund approved a project to give SACCOL an amount of R 5 million. R4 million of that fund is to develop SACCOs in the KwaZulu Natal and Mpumalanga and the 1 million is for on lending. The project offers the employment of 2 development officers and 2 compliance officers. Two provincial offices will be opened one in Mpumalanga and another in KwaZulu Natal to develop co-operatives there. It is expected that 6 co-operatives will be established in the provinces.

SACCOs have been requested to submit proposal for financing of entrepreneurs with good projects.

13.0 Conclusion

Savings and Credit Co-operatives have a lot of hope in South Africa, However, SACCOs need to work very hard and have products that will be appealing to their members. Prices of products need to be reviewed on a timely basis so that our service delivery is relevant.