Fincoop Savings and Credit Cooperative has embarked on a recapitalisation drive by its members aimed at accelerating the institution’s recovery.
The financial cooperative, which was recently hit by bad debts, among other related business shocks, has since urged its members to activate and recapitalise their accounts with K5 500.
The resolution was made last month during the cooperative’s 2014 annual general meeting (AGM) held in Lilongwe.
“During the 2013 annual general meeting members agreed to recapitalise Fincoop so that recovery can be accelerated and at the 2014 AGM last month, it was agreed that members should continue with recapitalisation,” said Fincoop acting general manager Mcmillan Nankhonya in an interview yesterday.
In 2011, Fincoop—which provides financial services to low and medium income earning people—was placed under statutory management by the registrar of cooperatives due to its poor financial performance resulting from non performing agriculture loans.
But Nankhonya explained that Fincoop efforts throughout the past two to three years have been on loan loss recoveries to achieve stability.
He said within the years, Fincoop has seen some positive things happening ,citing increase in shares, savings and loan book.
“In general, member services have improved as compared to how it was in 2010, however, we are not yet out of the woods,” he said.
The financial cooperative, according to Nankhonya, has also introduced new innovations such as use of mobile money products, which it says will likely complement government efforts to reach the unbanked.
He said fundamentals of Fincoop as a financial cooperative are the pooling of savings as a primary focus and lend to other members when sufficient savings have been accumulated.
He added: “In other countries Saccos contribute a huge percentage in their gross domestic product [GDP], and we believe Fincoop’s improved performance through recapitalisation will help to improve the financial position of its members and also contribute highly to the economic growth of our mother Malawi.”
According to Nankhonya, some members who had withdrawn their membership or those who were not active due to poor performance are returning to Fincoop.