WHAT IS SHARE CAPITAL IN A SACCO?
a) Share capital is the equity or core capital of the Sacco and represents each member’s ownership of the Society in terms of shares.
b) In simple terms it is the sum of money the Shareholders/Owners pay into a business entity.
c) These funds breathe life into the business entity enabling it to commence operations thereby achieving the objectives for which it was set up
d) All Saccos are required to have adequate core capital which comprises share capital + reserves or institutional capital. It is a legal requirement that all deposits taking Saccos (DT-Saccos) maintain a minimum core capital.
Note that:
Mwalimu National Sacco Total Assets have grown from Ksh 53B since the last share Capital drive . The total Asset as at December 2022 is Ksh 64.1B .
This necessitates the Sacco to increase its share captial so that it can match this growth and expand its funding base to enable the Sacco afford more access to credit to loan its members while maintaining financial stability.
In more simpler terms when a Sacco has a good Capital base in form of share capital we borrow less from external sources.
And this will lessen the burden of the Sacco in terms of debts. It’s long since the SACCO reviewed its share capital.
