AFRICA NAZARENE

UNIVERSITY

UNIVERSITY EXAMINATIONS
SCHOOL OF BUSINESS

PRACTICAL EXAMINATION
FOR THE AWARD OF MASTER OF BUSINESS MANAGEMENT
2023-2024 SEPTEMBER SEMESTER

MGT 616: STRATEGIC MANAGEMENT

Name: JAMES LENGEWA SAIPI

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Required
Background information:
SUPA SACCO was registered in 1988 under the cooperative ACT cap. 490 as a
cooperative society (CS No.5142). The idea of its conception started with twelve
butchers who wanted to support each other to raise funds on a merry-go-round
basis to improve their businesses. The Sacco was registered as Samburu Traders
Sacco but has since re-branded to SUPA Sacco Society Limited to enable it to extend
its services to people out of its common bond, to include: teachers, the Business
community, farmers, and individuals within the Samburu region, Isiolo, Laikipia and
Nyandarua. The society is continuously evolving into a modern financial institution.

The Sacco membership presently stands at 4547. The Sacco has the potential to
recruit more members exploit and target new markets and make more outreaches.

Establish the status of their strategic Management

SUPA SACCO has a strategic plan that is for the period 2021-2025. The strategic
plan was formulated by the Board in 2021 and an annual review is conducted with
this year’s review scheduled for Dec 2023. This helps the team understand where
the SACCO is at and guide in the steps to take.

Depending on the actual status, develop or review the organization's strategic

plan
Strengths, Weaknesses, Opportunities, and Threats (SWOT) Analysis of SUPA SACCO

Strengths Analysis
1. Loyal members/goodwill from stakeholders; the society has seen tremendous
increase in membership due to good service delivery, approximately 4500
active BOSA members. The growing strong brand presence ensure customers
voluntarily open BOSA accounts.
2. Human resource; the society has employed and retained talented staff who
are knowledgeable, well trained, dedicated and results oriented with a wide
range of experience amongst all cadres.
3. Strong brand acceptance; the growing member/customer base of the society
is indicative of the SACCO’s appeal to members and customer including
potential customers in the areas where the society has presence such as
 Kisima market. These members/customers voluntarily bank with the Sacco
despite other financial institutions in these areas.
4. Growing branch network within Samburu County; branches at Baragoi,
Wamba, Archers Posts and Nyahururu.
5. Patronage by other institutions/organization; for instance a number NGOs
operating in the County have chosen the SACCO as their banker of choice and
process staff salaries/payments through the SACCO.
6. Rapid FOSA/ banking service growth; A growing savings portfolio by
members/customers
7. Growing adoption of technology in service delivery; field collection POS and
mobile banking services
8. A strong capital base
9. Strong internal controls
[Link] customer service trained front officers
[Link] leadership

Weaknesses Analysis
1. Rigidity in some credit policies; graduation policy limit first time applicants
with the ability and securities to apply for huge loan above ksh 800,000.
2. Low capitalization; Sacco cannot issue huge loan due to low institutional
capital/ inadequate shares
3. Inadequate market research due strained resources; build robust marketing
strategy to penetrate many towns.
4. Lack of regular member training; intensive member education required
because of illiteracy levels in communities.
5. Low savings by members; due to low income levels/limited check-off
6. High cost of operations; Operation efficiency below industry
7. Low dividend/ interest rate
8. Inadequate Institution capital; below the minimum regulatory threshold of 8%
9. Lack of a full marketing department stifling growth.
[Link] unreconciled balances in the Trial Balance report
[Link] banking system challenges; frequent downtimes etc

Opportunity Analysis
1. Membership growth. Member recruitment drives, member retention
 2. Financial mobilization and management. membership shares/savings
mobilization, strengthening of capital base (institutional and core capital),
reconciliation and related financial.
3. increase market share and related issues such as public relations and the
need to enhance the SACCOs visibility
4. ICT - upgrade of core banking platform to allow mobile loans
5. Introduction of new products and services.

Threat Analysis
1. Instability; this is due to insecurity issues in Samburu North.
2. Cyber security; as more data is moved into digital platforms to meet the
evolving needs of the clients, the more the organization is exposed to more
risks.
3. Competition; entry of new players into the market has enhanced competition.
4. Poor Infrastructure; impassible roads during rainy seasons limit access to
market for new membership drives.
5. Illiteracy; 70% of local population is illiterate
6. Culture of handouts; mostly perpetuated/perfected by politicians and NGOs
operating within the Samburu County.
7. Government Policy; taxation and changes in policy governing Sacco
management threaten the sector as a whole.

Vision, Mission, and Values of SUPA SACCO

Vision statement

“To be a leading co-operative society offering competitive financial services”.

Mission statement

“To mobilize savings from amongst members and customers to provide affordable
financial products and services that uplift their living standards of our members”

Core values
 1. Honesty and Integrity; we strive towards being reliable at all times to our
stakeholders
2. Professionalism; we uphold and believe in competent and uncompromising
service to our stakeholders resulting in value added service delivery
3. Responsive and upholding stakeholder value

Strategic goals and objectives that will guide the direction and focus of SUPA
SACCO
Focus area Objective
1. Financial resources mobilization. 1. Deposit mobilization
2. Capital mobilization to 100
million
3. Turnover growth by 15% p.a
4. Cost management
2. Operations and internal business 1. Robust ICT infrastructure
processes 2. Customer service
3. Policies review
4. Service Delivery infrastructure

3. Marketing, growth and 1. Increase membership growth by

membership recruitment 25% annually
2. Member education/capacity
building
3. Branding visibility
4. Product and services 1. Develop new competitive
products and services
2. Taking services closer to the
consumer
3. Technological
advancement/mobile banking
system
5. Human resource 1. Recruit and retain competent
 staff
2. Staff performance evaluation and
management
3. Capacity building of staff
4. Staff motivation
6. Corporate governance 1. Capacity building
2. Tools of work (online approvals of
transfers and credit approval)
 Strategies and Action Plans that will help achieve the goals and objectives of SUPA SACCO in a phased-out
implementation framework.
Focus area Objective Actions: Timeframe Responsibility
1. Financial 1. Deposit 1. Increase in minimum Q1 2024 Board

resources mobilization deposit to 2,000 p.m

mobilization or 0.15% of loan
. applied
2. Increase by 10% in Q4 2024 CEO & Staff

the consecutive years

3. Reward highest savers Q4 2024 Board/CEO

2. Capital 1. Organize shares drive Q2 2024 Marketing

mobilization to 2. Increase income 2024 Board

100 million retention - at least
10% of turnover
3. Increase in minimum 2024 Board/CEO

% of individual share
held
3. Turnover growth 1. Diversify Q4 2024 CEO/Marketing

by 15% p.a products/services

2. Reviewing of interest Q1 2024 Board/Credit

rates and tariffs

4. Double the loan 1. Review graduation Q3 2024 Board
 portfolio from 400 policies upwards to
million to 800 shs. 1 million
million 2. Review loan multiplier Q1 2024 Board

3. Increase loan ceiling Q1 2024 Board

to shs. 10 million
4. Build capacity of Q2 2024 Credit
Manager
Recovery Unit
5. Intensify loan Q2 2024 Credit
Manager/Marketing
collection
5. Cost management 1. Adhere to budget and Q1 2024 Accountant &
CEO
budgetary control
2. Proper resources 2024 Accountant,
Internal & CEO
utilization to reduce
wastages
3. Cost cutting and 2024 Accountant, Internal
Auditor &
savings by way of cost CEO
budgeting
2. Operations 1. Robust ICT 1. Upgrade the core 2024 Board of Directors, ICT
Manager & CEO
and internal infrastructure banking system for
business online lending
processes capability-agency
banking and mobile
loans
2. Acquire additional 2024 Board/ ICT
 hardware on need Manager,& CEO

basis
3. Train ICT personnel 2024 ICT Manager

and users
2. Customer service 1. Develop a new service 2024 Board/CEO/Marketing

charter
2. Train customer service 2024 CEO/Marketing

staff
3. Policies review 1. Credit approval level 2024 Board/CEO

review
2. Marketing Policy
3. Product Development
policy
4. Service Delivery 1. Agencies and branch 2024 CEO

infrastructure 2. Equipment -motor 2024 Board

vehicle
3. Improvement of 2024 Board/CEO

branch infrastructure
4. Review terms for third 2024 Board

party service provider

in mobile banking
3. Marketing, 1. Increase 1. Open a new 2024 Board & CEO

growth and membership branch/agency

membership growth by 25% (banking) in
 recruitment annually designated areas
2. Review performance 2024 Board
Accountant CEO
of existing branch
network
3. Recruitment drives 2024 CEO

2. Member 1. Identifying training 2024 Board/CEO

education/capacity needs for members

building 2. Capacity 2024 Board

building/training of
members
3. Branding visibility 1. Advertisement and 2024 Board/CEO

publicity
(Advertisement
boards and signage’s)
2. Increase of 2024 Board/ CEO

promotional materials.
3. Branding of agency 2024 Board/ CEO

outlets.
4. Refresh the brand 2024 Board/ CEO

outlook (the logo,

color scheme,)
4. Product and 1. Develop new 1. Diversify range of 2024 CEO/

services competitive products and services Marketing/Credit/Financ

products and e
 services 2. Proper market 2024 CEO/Marketing/Finance

research and
competitor analysis
3. Intensify marketing of 2024 CEO/Marketing

products/services
2. Taking services 1. Introduce more POS 2024 CE

closer to the 2. Open agency outlets 2024 Board

consumer 3. Introduce mobile 2024 Board

banking
4. Undertake door to 2024 CEE

door visits/campaigns
3. Technological 1. Upgrade system to 2024 ICTM & CEO

advancement/mob accept mobile loans

ile banking system 2. Develop ICT policy to 2024 ICTM & CEO

guide against risk

associated with
mobile banking
3. Develop mobile apps 2024 ICTM & CEO

and enhance use of

ATM to facilitate
modern and efficient
finance
4. Cloud storage of data 2024 ICTM & CEO

5. Regular System audit 2024 Board/CEO

5. Human 1. Recruit and retain 1. Review and set 2024 Board of Directors &
CEO
resource competent staff minimum qualification
and experience for
positions
2. Improve HR policy 2024 CEO

2. Staff performance 1. Implement a 2024 CEO

evaluation and performance

management management system
2. Develop performance 2024 CEO

management tool
3. Job evaluation 2024 CEO

(identify skill gaps,

JDs, remuneration)
4. Staff duty rotation 2024 CEO

3. Capacity building 1. Identify Staff Training 2024 CEO

of staff Needs
2. Undertake staff 2024 CEO

training, team
building, bench
marking
4. Staff motivation 1. Staff remuneration 2024 CEO

2. Review of terms and 2024 Board

condition of services
to match or exceed
 the competitors
(employment
contracts)
6. Corporate 1. Capacity building 1. Organize training and 2024 Board

governance Benchmarking for

board members
2. Governance tools 1. Review of by-laws to 2024 Board
introduce delegates
system
Recommendation

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Expert Review

Recommendations for Improvement in Supa SACCO:

Financial Resources Mobilization:

Diversify Income Streams: Explore avenues for additional income, such as

investment opportunities and partnerships, to diversify revenue sources.

Enhance Savings Products: Introduce innovative savings products to attract a

broader member base and encourage higher savings.

Operations and Internal Business Processes:

Implement Technology Upgrades: Invest in updated technologies to streamline

internal processes, enhance efficiency, and improve member services.

Regular Training Programs: Conduct regular training programs for staff to keep them
updated on industry best practices and technological advancements.

Marketing, Growth, and Membership Recruitment:

Strategic Marketing Plan: Develop and implement a comprehensive marketing plan

to increase visibility and attract new members.

Community Engagement: Foster stronger community engagement through local

events, workshops, and partnerships to enhance the SACCO's presence.

Product and Services:

Diversify Product Portfolio: Introduce new financial products tailored to the evolving
needs of members, such as digital banking solutions, investment options, and
insurance products.

Regular Product Reviews: Conduct periodic reviews of existing products to ensure

relevance and competitiveness in the market.
Human Resource:

Skills Development Programs: Establish ongoing training programs to enhance the

skills of employees, keeping them abreast of industry trends.

Performance-Based Incentives: Implement a performance-based incentive system to

motivate employees and reward excellence.

Corporate Governance:

Regular Governance Audits: Conduct regular audits of corporate governance

practices to ensure compliance with regulatory standards and best practices.

Board Training: Provide training for board members on corporate governance

principles, risk management, and strategic planning.

Risk Management:

Robust Risk Assessment: Establish a comprehensive risk management framework to

identify, assess, and mitigate risks associated with financial operations.

Emergency Preparedness: Develop and implement contingency plans to address

unforeseen challenges and ensure business continuity.

Member Education:

Financial Literacy Programs: Initiate programs to enhance the financial literacy of

members, empowering them to make informed financial decisions.

Transparent Communication: Foster transparent communication with members

about SACCO operations, financial performance, and future initiatives.

Social Responsibility:

Community Impact Initiatives: Undertake social responsibility initiatives that

contribute positively to the community, strengthening the SACCO's image and
community ties.

Performance Measurement:
Key Performance Indicators (KPIs): Establish clear KPIs for each department to track
and measure performance against organizational goals.

Regular Performance Reviews: Conduct regular performance reviews to identify

areas for improvement and celebrate successes.

Self-Reflection
This experience emphasized the need for structured SPs within financial institutions
to bridge the gap between theory and practice, fostering a comprehensive
understanding of real-world scenarios. Timely reviews are paramount, offering
insights into operational dynamics, member services, and potential areas for
improvement.

The collaborative nature of the project underscored the importance of team

involvement. Examining Supa SACCO's operations collectively revealed the nuanced
challenges and opportunities inherent in the financial sector. The necessity for
adaptability emerged as a key takeaway, emphasizing the importance of evolving
strategies in response to changing economic landscapes.

Reflecting on this experience, it is evident that well-organized SPs contribute

significantly to organizational growth. The lessons learned from Supa SACCO
reinforce the value of timely, comprehensive reviews and the integral role of a
collaborative team effort. Moving forward, I recognize the enduring impact of SPs in
driving sustained success and innovation within financial institutions.