Fodya Sacco profits down by 17 percent

Fodya Savings and Credit Cooperative (Sacco) has posted a K65 million profit for the year ending December 2020, a financial statement for the cooperative shows.

This represents a 17 percent drop in profits when compared to the K79 million the cooperative posted in 2019.

This follows an annual general meeting the cooperative held in Lilongwe recently.

Its president Moses Makaika attributed the drop to effects of Covid and massive retrenchment in tobacco-buying companies, which resulted in increased default rate on loans.

“Our Sacco operated under a very challenging environment and this had an impact on its performance in the year under review. Some of the challenges include the take-home pay rule of 50 percent, reduction in interest rates on members’ loans and maintaining deposit interest rates,” Makaika said.

Makaika further said the Sacco faced stiff competition from other financial institutions in the year gone by.

He, however, said the cooperative continued to post good results, including 22 percent growth in assets and 21 percent loan portfolio.

Lilongwe Chapter Sacco President Faith Nakanga observed that the majority of Malawians still consider Saccos as financial platforms for lowly paid workers.

“We have a lot of Sacco’s that have the potential to make it big but the problem is mindset. Many Malawians think Sacco’s are for the poor but in countries such as Kenya people have made a fortune after investing in such cooperatives. When the Sacco is big, the impact from external factors is minimal,” Nakanga said.