Everything You Should Know About Mwalimu National Sacco

Everything You Should Know About Mwalimu National Sacco

Mwalimu National SACCO is the largest SACCO in Africa in terms of assets, primarily catering to teachers and education professionals. Founded in 1974, it was created to provide financial solutions for educators but has since broadened its membership to include civil servants and business individuals.

For many years, Mwalimu experienced robust growth due to the high number of teachers. In 2014, the SACCO acquired a majority stake in Spire Bank for Ksh2.4 billion, aiming to enhance its financial services.

However, the bank faced significant losses, prompting Mwalimu to invest approximately Ksh10 billion over the years to sustain its operations. As losses continued to rise, the Sacco Societies Regulatory Authority (SASRA) prohibited Mwalimu from providing additional funds. In 2023, Mwalimu reached an agreement with Equity Bank to take over Ksh1.32 billion in deposits and Ksh945 million in loans, ensuring members could access their funds.

The acquisition of Spire Bank marked a difficult period for Kenya’s largest SACCO. Around the same time, Mwalimu was also engaged in a tax dispute with the Kenya Revenue Authority (KRA), which initially sought Ksh1.2 billion in unpaid taxes. After a review, the Tax Appeals Tribunal reduced the amount to Ksh44.9 million, but Mwalimu contested this decision in court. The High Court dismissed the appeal, affirming that the tribunal had already issued a final ruling on the matter.

In 2024, the SACCO encountered further financial difficulties as its institutional capital to total assets (ICA) ratio fell from 10.17% in 2022 to 7.7%, dropping below the 8% regulatory minimum set by SASRA. This decline was largely due to the challenges associated with Spire Bank, which significantly impacted the SACCO’s financial flexibility.

The write-off of the failed bank’s liabilities affected Mwalimu’s liquidity, making it one of the financially struggling institutions that year. Nevertheless, by streamlining its operations and finalizing the deal with Equity Bank regarding Spire Bank, the SACCO took steps toward recovery, aiming for better financial stability in the future.

Here are some recent returns for members:

For the year ending December 2023:
– 11.5% in dividends on shares
– 10% interest on deposits

For the year ending December 2022:
– 10.5% in dividends on shares
– 10% interest on deposits

Mwalimu National SACCO 2024 Results:

• Interest on Member deposits: 10% [2023: 10%]
• Dividends Rates on Member’s Share Capital: 13% [2023: 11.5%]

Membership Categories and Requirements for Mwalimu Sacco

Membership in Mwalimu National Sacco is available to individuals in the following categories:

– Teachers Service Commission (TSC) Secretariat
– TSC Secondary School Teachers
– TSC Lecturers
– TSC Primary School Teachers (Diploma or Degree holders)
– Spouses and children of members in formal employment
– Ministry of Education staff
– Employees of Mwalimu National Sacco and its subsidiaries

Financial Products and Services Offered by Mwalimu Sacco

Risk Fund

This is a mandatory insurance program where each member pays Ksh400 every month. The fund is designed to cover the outstanding loan amounts of deceased members and provides benefits for final expenses, while also doubling the shares that are payable to beneficiaries.

Burial Benevolent Fund (BBF)

This welfare fund assists members with funeral costs. The monthly contribution is Ksh150, and the benefits include:

– Member: Ksh60,000
– Spouse: Ksh55,000
– Children (up to 6): Ksh35,000 each
– Own Parents: Ksh20,000
– Parents-in-law: Ksh15,000

Loan Requirements for Mwalimu Sacco

Mwalimu National Sacco provides various loan options:

General Loan Requirements

– A fully filled loan application form
– The latest certified pay slip (not older than two months)
– A copy of a National ID or valid passport
– Guarantors who have been contributing for at least three months
– Members must have actively contributed for a minimum of three months

Loan Guarantee and Security

– Loans require guarantors who are also active members of the Sacco
– Both guarantors and applicants must have savings equal to or greater than the loan amount
– Members can self-guarantee if the loan amount matches their savings

Loan Amount and Processing Time

– Borrowing limit: 3 to 6 times one’s savings (subject to the third-take-home rule)
– Processing time: Up to 4 working days; emergency loans take 2 days
– No penalties for early loan repayment

Savings and Deposits at Mwalimu Sacco

Mwalimu National Sacco offers savings and deposit accounts for its members:

– FOSA Account: Automatically provided to members upon joining
– Fixed Deposit Account: Earns interest on locked savings
– Mwalimu ATM/MasterCard: Available upon request, usable at Kenswitch ATMs

Digital Banking at Mwalimu Sacco

Mwalimu Sacco offers mobile banking services through Go-Mobile, powered by Spire Bank. Services include:

– Balance inquiries
– Salary advances
– Mini statements
– Transfers between Mwalimu Sacco and M-Pesa

Account Access and Withdrawal at Mwalimu Sacco

Deposit Reflection Times

– M-Pesa deposits: 24 hours (on working days)
– Local bank deposits: 12-48 hours
– Diaspora deposits: 2-4 working days

Methods of Account Access

– USSD (809#)– Log in using a temporary PIN sent upon registration
– Web Portal– Activate and access online
– Mobile App – Download and log in after activation

Membership Withdrawal and Share Offsets at Mwalimu Sacco

Members wishing to withdraw must:

– Submit a written request for withdrawal
– Ensure all guaranteed loans are re-guaranteed before processing refunds
– Settle any outstanding loans before full withdrawal is approved
– Partial withdrawal of shares is only permitted for retired members.

Requirements for Joining Mwalimu National Sacco

To become a member, applicants must provide:

– A fully completed membership application form
– A copy of the National Identity Card (both sides)
– An original, current pay slip
– Three recent passport-sized photographs

Applications can be submitted in person at Mwalimu Towers, Upper Hill, Nairobi, or at any branch of Mwalimu National Sacco.

In conclusion,

Despite facing difficulties in recent years, Mwalimu National Sacco continues to be an essential financial institution for teachers and education professionals in Kenya. With its wide range of loan and savings options, digital banking services, and programs aimed at member welfare, the Sacco remains committed to promoting financial growth and stability for its members.