Fincoop Sacco gross margin up by 3.6 percentage points

By Deogratias Mmana:

Fincoop Savings and Credit Cooperative (Sacco) remains profitable witnessed by a 3.6 percentage point increase in its gross margin, the cooperative’s statement of financial position says.

The statement indicates that the cooperative posted a K100.6 million profit against an operating income of K311.3 million, resulting in a gross margin of 32.3 percent for 2022.

However, the company posted a profit of K103.3 million against an operating income of K360 million translating into a gross margin of 28.7 percent in 2021.

In an interview, Fincoop Sacco president Henry Chiwalo said that total asset value for the institution increased by 63 percent to K1.1 billion in 2022 from K675 million the preceding year.

He added that its membership grew by 11 percent to 17,755 in 2022 from 15,796 in 2021.

“The Sacco borrowed $300,000 from Energy Access Relief Fund at the rate of five percent per annum for on-lend to members; hence, the increase in the loan portfolio,” Chiwalo said.

Malawi Union of Savings and Credit Cooperatives (Muscco) Head of Finance, Human Resource and Administration, Uchizi Nkhata, commended the Sacco for the performance, saying it has taken a positive direction.

“Fincoop Sacco was the biggest sacco in the country in 2009 with about 45,000 members but lost its glory after it gave out many agricultural loans which borrowers failed to service due to poor harvest. This forced the institution to write off about K500 million loans. However, with the current trend, it is poised for more success in coming years,” Nkhata said.

Financial Access for Rural Markets Smallholders and Entrepreneurs (Farmse) Rural Finance and Microfinance Specialist Samson Phiri said the organisation has been helping Fincoop Sacco and that it has recently signed a K398 million grant with the Sacco so empower it to reach 12,000 people in rural areas by 2025.