EQUITY Bank Group Holdings MD, James Mwangi has commended Savings and Credit Cooperative Societies (Saccos) for their role in promoting financial literacy in the country, but challenged them to do more.
Speaking as the chief guest at Sheria Sacco Annual General Meeting over the weekend, Mwangi regretted that the country lags behind her neighbours regarding savings.
“One of the biggest challenges in Kenya, and what we are having big problems with, is that the saving culture in Kenya has become very weak. Our savings to GDP is eight per cent. In the region, the savings of Uganda, Rwanda, and Tanzania are 24 per cent of GDP. They are saving three times more than us,” he said.
Mwangi, a guru in the banking sector in Kenya, warned Saccos against being excited about giving high dividends, but rather to encourage members to plow profits into savings and investments.
He added that the bank has grown exponentially because of a savings model where shareholders have agreed to keep their savings growing within the bank.
He added that borrowing irresponsibly has destroyed many livelihoods and businesses.
“Never borrow to drink or to take your friends to a party. That is now living beyond your means. We borrow only to put that money into an earning investment because it is the earnings that pay for the borrowing. If you have that discipline, then you never have a problem with borrow ing. Borrowing becomes a problem when we take loans and consume,” he advised.
Mwangi who was raised by a single mother in Nyagatugu Village in Murang’a county said he worked hard to become the first to attend university in his village and he has gone further to champion a savings and investment culture in the village.
He said: “We own 17 per cent of the Equity Bank, that’s almost Sh50 billion. Now, when a village owns 50 billion shillings, its GDP per capita is higher than that of Switzerland. So, if I have converted my village to have the same status as Switzerland, we can convert every village.”
