Mwalimu Sacco:The Benefits of ISO Certification

When Mwalimu Sacco Society became the first society to be certified by ISO in September 2009, many in the cooperative sector in Kenya wondered what it was all about. Was it really necessary for a sacco to be certified? I too, could not provide the answer to the question, so I went over for a discussion with the chairman of the Mwalimu Sacco, Mr. Shem Motuka.

BY Emma Muli

What is ISO? The simple answer is that it is an acronym for the International Standards Organisation. .Started in 1947, the ISO has its headquarters in Geneva Switzerland, and according to Wikipedia, it sets stands all over the world. In its website, it says it is an NGO, but as Wikipedia says, “Its standards are as good as law” all over the world. Nearly all governments in the world have signed its treaties. Kenya too is signatory of its treaties.

Sacco Records Shortest Time for Certification

Mr. Motuka first informed me that his organization has taken the shortest time ever to be certified by ISO. And that is, according to Motuka, because the sacco has had everything required for certification in place for a long time. “We had a service charter, a strategic plan and we had already institutionalized performance contracting. We have been operating within the standards for a long time.”

The service charter stipulates the standards of service delivery. For example, how long will it take for your loan to be processed when you hand over your application at Mwalimu Sacco? What do you expect the staff of Mwalimu Sacco to do when you launch a complaint against the society? These are some of the questions answered in a service charter.

Role of Strategic Plan

What about a strategic plan? Simply put, a strategic plan is a road map, stipulating what a society expects to achieve within the plan period. In doing this of course, it takes account of an organization’s vision and mission, strengths and weaknesses and what needs to be adjusted to achieve the goals of the strategic plan. How will you implement the plan? How will you monitor and evaluate it?

In a sense, the operationalization or the implementation of the strategic plan at individual level forms the staff performance contract. The key question for the staff member is: In view of the goals stipulated in the strategic plan, what will you, as an individual achieve? Mr. Motuka says, “Performance contracting specifies targets within a given period. For example, if the board of management says that loans worth Shs 600 million must be given in a month, that goal must be consistently attained.”

Independent Assessors

Of course the ISO works with other assessors. According to Mr. Motuka, in the case of a sacco, the board and staff are assessed through the Annual General Meetings. There are internal and external assessors too. External assessors comprise officials of the Ministry of Cooperative Development, Kuscco and Treasury. Internal assessors are the sacco’s departmental heads.

Evaluation

Mr. Motuka explains, “Evaluation is done using standard tools or parameters. For example, by how much has the sacco membership grown? By how much did turnover and loans increase? How are loan defaulters and liquidity issues tackled? Quality issues such as customer satisfaction are also evaluated. The sacco carries out regular surveys to find out the levels of customer satisfaction.”

The Survey

In the last survey, Mwalimu Sacco had a score of 79.8 in customer satisfaction. “Our target for 2009 is 85 per cent. If it falls below that, it is an indication that something is wrong. Performance contracting has changed the way of doing things. Now we have to work with set targets,” says Mr. Motuka.

At an individual level, the directors of Mwalimu Sacco are certified directors. “This means that the directors have passed a test which makes them able to sit as directors in any company in the private sector.” And the test is not an easy one. “If you cannot pass the examination, you are barred from being a director.”

 

At the sacco level, the cooperative gets a strong and focused management that is responsive to the needs of the members.

 

Examples of Results

 

Take for example the approval and paying out of loans at Mwalimu Sacco. Mr. Motuka explains, “We have delegated loan processing to the staff. This enables members to get loans immediately since there is no involvement of the management committee although the committee remains accountable. Because of this, management committee meetings are occasional and generally called to deal with deferred cases.”

 

For a sacco that gives loans amounting to more than Shs45 million weekly, this is an enormous responsibility given to the staff. But statistics show that the staff has been equal to it. Development loans which in most saccos take months are processed within three days. And only loans exceeding Shs1 million require the approval of the management.

 

With a membership of 46,700, Mwalimu Sacco boasts of having the highest savings. Because of this, its surplus exceeds one billion shillings.

 

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