Fincoop Sacco upbeat on capital requirement

Financial Cooperative (Fincoop) Savings and Credit Cooperative (Sacco) is upbeat that it will solve capital challenges to comply with Reserve Bank of Malawi (RBM) regulatory requirements.

Fincoop Sacco president Fletcher Mhango said this in an interview recently on the sidelines of the Sacco’s annual general meeting in Lilongwe to review the 2018 performance.

Fincoop Sacco has been struggling with capital adequacy issues, resulting in in its failure to meet member loan requests.

Mhango said since the Sacco revamped its management, the performance is picking up as evidenced by growth in membership, loan portfolio and profitability.

He said the capitalisation drive has borne fruits as RBM has given the Sacco a conditional operational licence.

“One of the challenges highlighted by the central bank has been the capital adequacy. So, we are seriously working on the issue and the moment we get through this then we are good to go.

“As a Sacco, we are sailing in economic turbulence and looking at interest rates that are dropping, they have an impact on our business because we also reduce lending rates as such the accrued interest levels become thin.”

In the year under review, membership grew to 8 475 from 6 927 the previous year.

On the other hand, Capital ratio improved by 36 percent from -94 percent in December 2017 to -57.5 percent while net loan portfolio increased from K151 million to K231 million.

Fincoop Sacco total equity improved and share value increased from -6.87 percent to 24 percent.

The Sacco registered a K16.8 million profit but did not declare dividend.