As Mwalimu National D.T SACCO (MNS) celebrates its 50th anniversary, Chief Executive Officer CPA Kenneth Odhiambo reflects on the institution’s journey of growth and resilience. Over the past few years, MNS has overcome major challenges to protect members’ funds and promote sustainable growth. During this period, membership has surged, assets have grown, and the SACCO has expanded its focus beyond teachers to include salaried employees and business people.
With a clear strategy to grow its membership to 180,000 and assets to KSh 100 billion, MNS is enhancing digitalization, improving the member experience, and prioritizing Environmental, Social, and Governance (ESG) initiatives. Looking ahead, the institution is committed to building a lasting legacy of sustainability for future generations.
Below is a Q&A with Mwalimu National D.T SACCO CEO CPA Kenneth Odhiambo.
Congratulations Mwalimu National Sacco, on the occasion of your 50th Anniversary!
Looking back what have been your greatest achievements during this period?
We made investment decisions to protect the institution from financial losses, particularly to safeguard members’ funds, while membership grew from 106,602 in 2021 to 131,252 by December last year. Total assets increased from 60.63 billion to 67 billion, reflecting moderate growth, though impacted by past investments. Meanwhile, the organization is restructuring its subsidiaries to refocus on its core business. Effective this year, a new corporate strategy aims to reach 180,000 members and further asset growth within three years. We have charted a clear path for achieving these goals.
What plans do you have for further expansion?
The institution is concentrating on financial services and moving away from unrelated investments. Previously limited to teachers, membership is now open to all salaried employees and business people. This expansion has attracted interest from unexpected sectors, including banks and institutions like EY. The aim is to reach 100 billion in assets and 180,000 members in the next few years, shaping the future business trajectory. A primary focus is improving member experience through digitalization and self-service options, adjusting to trends in financial services.
Expanding members’ financial offerings beyond salary-based services to cover broader financial needs is a focus. Key focus areas include membership growth, deposits, loans, and revenue to support retention and build capital for sustainability. The institution prioritizes Environmental, Social, and Governance (ESG) initiatives, forming partnerships and collaborations to drive holistic growth beyond credit services.
Mwalimu National Sacco is the largest Sacco in Africa. How many people in Kenya know this fact? What does Mwalimu National Sacco (MNS) do to spread this fact amongst the Sacco confraternity? Does MNS have an annual campaign to persuade newly qualified teachers to join MNS?
The institution runs ongoing visibility initiatives through digital platforms like social media. We also have regular engagements with stakeholders through webinars and physical meetings. An upcoming engagement is planned in central Kenya. As part of the 50-year celebration, there are efforts to raise public awareness about MNS, including media campaigns via radio, TV, and banners. A recent report from the regulator emphasized the institution’s current position, but much work is still ahead. The focus is shifting from teachers to the general public, mainly growing the quasi-banking unit for business expansion. Delegates are serving as brand ambassadors, helping boost public visibility.
In terms of numbers, we currently have 139,463. That is as of July, and that covers the whole spectrum. Our monthly inflows, from TSC alone, should be 2.1 billion a month. The other segments are around 800 million. (Around 780 million) a month. So that’s pushed us to around 2.9 billion. We aim to increase this number to 3.5 billion monthly in the next two years. That will give us a very solid ground in terms of doing business and growing the institution in relation to what we offer and our asset base.
The Kenya Economic Survey 2024 states that, in 2023, there were 93,988 schools in Kenya. Of these, 47,666 were pre-primary (32,461 public – 68%, 15,205 private – 32%), 35,570 primary (23,831 public – 67%, 11,739 private – 33%), and 10,752 secondary (9,485 public -88%, 1,267 private – 12%). In addition, there were 64 teacher training colleges (35 public – 55%, 29 private -45%). Of the total 94,052 schools and teacher training colleges, 28,240 (30%) of the entities are private. Do teachers in these private entities also belong to MNS and, if they do, does the number of teachers in private entities who belong to MNS roughly align with these percentages?
We are targeting partnerships with private institutions, specifically focusing on teachers, staff, and heads of functions within these institutions. We currently have data on around 17% of these institutions, but we aim to increase that to around 60% within the next three years. This sets a clear path for the work we need to do to get there. We see this segment as a major growth opportunity, especially since most SACCOs have yet to tap into it. By next year, we expect to gain momentum in onboarding more members, including those from private universities, which will help us expand our membership and influence.
Membership of the Kenya Private Schools Association (KPSA) is open to all proprietors of private schools i.e. Pre-Primary, Primary, Secondary, and the Private Teacher Training Institutions (Low cost, Medium cost, and High cost). As stated above, there are 28,240 private institutions. KPSA’s website is out of date but its states that its members teach over 2.1 million primary school children and over 277,000 secondary school children. The number of teachers is not shown. What is the inflow into MNS from the teachers in these private schools?
We already partnered with the Kenya Private School Association (KPSA) and have engaged with them, including attending their national conference this year. We’re working with their top leadership to access private schools and expect to onboard other institutions. With our open common bond, our goal is to cover 60% of private institutions within two years. This partnership will help us achieve that target despite the mobility of teachers and employees in private institutions, who tend to be more agile than those in TSC. This agility presents lower risks in managing credit products, though we refine our credit risk management processes as we grow.
In addition to KPSA, we are pursuing other partnerships, including those in the pension sector. Several employees are also part of this initiative. This focus will guide our next two years. This year marks the start of our short-term review strategy to reshape our business model. Instead of focusing on the masses, we are prioritizing initiatives that add more value, as we recognize that many teachers face constrained incomes and the government has fiscal pressures. We’re also paying more attention to TVETs, which have significant potential. Their positive response, along with their trust in us over other country-based SACCOs, gives us confidence.
Some teachers should be able to save a substantial portion of their salaries. Those who live in boarding schools could eat with the students and save considerable amounts. Do any do this?
It’s a mixed bag regarding our members’ savings culture. Based on demographics, we’ve observed that those aged 35-45 are more focused on saving, while the younger group, aged 25-35, tends to prioritize credit over savings. This is concerning because they should ideally be saving more. This trend forces us to rethink our sustainability initiatives, especially as older members exit the workforce and their savings contributions decrease.
That also brings us to the next issue of how we model our sustainability initiative moving forward, assuming that at some point in time, these other teachers will also exit service, and their savings will be depressed. Even though many of them may be members, they may not have the financial muscle they had when they were working.
We must rethink our onboarding strategy to make the SACCO more attractive to the younger generation. This group, particularly Gen Z, prefers digital interactions, such as applying for loans and managing accounts through their phones, without physical contact. We are reshaping our services to align with these preferences while balancing the needs of different age groups, including those nearing retirement.
Would you say that there is a saving culture among Kenyan teachers? For Kenya as a whole, the gross savings rate was 12.1% of a person’s income in December 2022, which is the highest it has ever been. In December, 2008, it was a record low of 10.1%. Singapore’s savings rate was 48.6% in both 2020-2023.
Yes and no. If we look at our current portfolio in terms of deposits, we are currently seeing higher deposits than loans—about 51 billion in deposits versus a loan book of 46 billion. That extra 5 billion tells you people are saving more than we’re lending. This shows a strong savings culture within this group. But on a national level, we still need a solid framework to boost savings across Kenya.
If you look at places like Singapore and the Caribbean, they’re doing a great job attracting youth, with much higher participation than here in Africa or even in Europe and America. So, the question is: What are they getting right that we’re missing? Policymakers need to rethink this to drive a stronger saving culture. Yes, times are hard, but part of it comes to making sacrifices.
There’s also the concern of liquidity—what happens if these deposits are withdrawn when loans are tied up? To manage this risk, we must keep a buffer, maybe in investments. But ultimately, it’s about more than just financial services. We’re not just dealing with money; we’re selling confidence. If people trust us, they’ll bring their money. If they don’t, they won’t. Confidence is the key to building deposits and driving growth. That is the focus.
This is a difficult question for you to answer, but do teachers try to transmit a saving culture to their students? Many children fall into drugs and alcohol abuse because their parents do not train their children in the importance of sobriety and personal responsibility. Can MNS in its contacts with teachers try to get teachers to be alternative role models in place of parents?
In our small way, we’ve tried to introduce financial literacy to our members, hoping they pass it on to their students. But this is still in its early stages, as many teachers struggle with saving. The question is how to integrate this for students, especially when managing pocket money. We’re exploring a platform where students can deposit their pocket money with us, withdrawing it in bits as needed. This would help instil a savings culture early on.
However, this requires a collective effort. Younger generations, like Gen Z, often question why they should save instead of spending now, which disrupts the savings flow. Policymakers need to address this mindset. Attracting deposits from the next generation will be tough unless we nurture them early. Each institution must take the initiative; collaboration is critical to driving this agenda. Otherwise, how will saccos be sustained going forward if these problems are not understood?
Do you have any personal advice that you can give them?
For the youth segment, it’s necessary to help them understand the benefits for themselves before expecting them to join. We’re now opening engagement platforms—social media, digital platforms, and the like—where we can build conversations around the savings culture. We focus on showing them the benefits they’ll get because that’s the language they understand. You have to show them the value before bringing up the idea of saving.
Our products and services must align with what they’re looking for. Once we address that, the savings culture will naturally follow and become ingrained as they move forward. This has to be a deliberate process: start with what’s in it for them, then show how saving will support their goals and financial needs in the long run.
MNS is a really big organization, does it have the necessary controls in place to present the type of stealing that allegedly occurs in many government and private institutions?
This is an evolving challenge for many institutions, including MNS. As our IT systems advance and we move into digital spaces, new risks emerge, particularly cyber risks, widespread in the financial services sector. To counter this, we focus on resilience—ensuring our cyber preparedness and controls are robust to protect what our members entrust to us. However, no fraud can occur without internal involvement. When issues arise, they often start from within, with internal people enabling external threats.
We continuously work on improving our systems, conducting regular internal audits—financial and IT—and receiving governance recommendations each year. But even with these measures, complete elimination of fraud isn’t possible. Some of the most resilient institutions, including major banks, have faced fraud involving senior managers, people you wouldn’t suspect.
The key is continuous improvement, ensuring controls and risk mitigation are in place to reduce vulnerabilities. This effort must extend across all levels of governance, ensuring that policies work and that we protect the interests of those who trust us with their funds. Unfortunately, even board members have been implicated in governance failures, which is alarming.
The sector requires heightened surveillance, but regulatory bodies are over-stretched. We still need to see stronger resilience across the board to address these persistent issues.
When teachers take out loans, what do they mostly use the borrowed money for?
Looking at our data, we see a lot of our funds going towards construction and housing. There’s also a significant focus on farming and agriculture, while some SMEs direct their loans to business ventures. Smaller amounts are used for social needs like school fees and medical expenses. Interestingly, many members borrow large amounts, and considerable savings are also happening. What stands out is that even those not in active employment are repaying comfortably. For example, one member borrowed 40 million, and despite retiring long ago, he repays it easily because his property remittances come directly to the Sacco. People do not have to sign for these; their security is their property.
Do many borrow to buy cars?
Yes. Many in the lower segment, mainly newly employed teachers, borrow to buy cars. They often rely on mobile loans, which are deducted from their salary at month-end. Interestingly, while some of us haven’t changed cars in four or five years, the new teachers prefer getting new ones.
Banks in Kenya enable their customers to use their phones as their bank accounts. Does MNS do the same?
Absolutely. Our mobile banking app offers a wide range of features. Members can check balances, deposit, withdraw, transfer funds, make payments, and even apply for loans—all through the app. We’ve made it so you no longer need to fill out physical forms for credit. For instance, if I’m in Malindi and need a guarantor in Busia, I just input my details on the app, and they can log in remotely to guarantee me. This has reduced turnaround time significantly. We’ve linked the National Registrar of Passports Bureau to validate identities, and any processed amount is securely handled through our quasi-banking system and only withdrawable through the mobile app. We’re also moving towards self-service platforms with AI integration to reduce branch interactions and phone calls. The app functions much like a bank, with the only thing missing being a payment platform system. You can do everything from withdrawing money, buying airtime, and making utility payments (like Kenya Power) to applying for loans and having guarantors sign up remotely. I even tested it in the US, and it worked very well.
Is the interest rate on loans borrowed by teachers from MNS lower than that charged by a bank?
When banks raised their rates above 20 per cent, our weighted average cost of capital remained around 12.8 per cent, meaning we were significantly lower. One key advantage for SACCO members is that we don’t change interest rates when running loan contracts. Unlike banks, which often adjust rates, if we sign at 12% or 13%, it stays the same until the loan is fully repaid. There’s also added convenience—SACCOs don’t charge multiple fees like banks, such as application or processing fees. We aim to provide members with affordable credit access rather than focusing on commercial profits.
What is your biggest challenge in running such a huge and successful Sacco, How do you manage them?
It’s quite a mixed bag. One major challenge is balancing the ever-changing demands of our members—particularly their expectations for year-end returns, which translate into dividends—against the financial stability of the institution. It’s a delicate balancing act requiring some tough decisions.
I remember when we were addressing issues with the banks, there was a lot of noise around those matters. We couldn’t hold on to anything negatively affecting the SACCO or consuming too much of our time. Some of those major decisions were challenging, but in hindsight, they were among our best. The market is quieter now, and our members are more receptive and comfortable, knowing we’re responsive to what they’ve entrusted us.
It’s important to continuously engage stakeholders, informing them about what we’re doing, our prospects, and how we envision the future. This ongoing communication helps bridge gaps that misinformation could fill, particularly on social media. When people have the facts, misinformation doesn’t gain as much traction.
Those are some of our challenges, but I believe we’re moving towards a much better and more stable position. In the next two years, we’ll be on even safer ground.
What are the benefits of joining Mwalimu sacco? Can anyone join?
Yes, anyone can join. We’ve been given the scope to invite people, and as I’ve mentioned, we’ve seen interest from various entities, even from banks—where we assumed they had better terms. Yet, we’ve had their staff joining us. So, we welcome everyone. Our visibility in the media has also attracted a lot of prospective members.
What percentage of outsiders have joined that are not members of your SACCO?
I have mentioned 17% of the total membership. Our aim is to increase that to 60% in the next two years, in 2026.
And can you see that happening?
Yes, we can see it happening. If we stay on track and keep our promises as a brand without backtracking, it will happen.The critical aspect is maintaining confidence and ensuring people speak positively about us. That’s our view on the matter.
Anything you’d like to add?
The situation was quite dicey a few years ago, but we’ve made significant progress in the last two to three years despite many challenges. We decided to move past the setbacks and focus on what we could do for the institution. Our main priority now is ensuring the sustainability of the MNS for the next 20, 25, or even 30 years, even after some of us are no longer here. As I often remind my colleagues, it’s about the legacy we leave behind. While we still face challenges from past mistakes, we can’t dwell on them without taking action. That’s what we’re addressing as we move forward.
