K-Rep Fedha Services Limited
(KFS)
K-Rep Fedha Services is the newest subsidiary company of K-Rep Group. It was formed in the year 2005 to offer management services to financial services association.
Financial Services Association (FSA’s)
Financial services associations (FSA’s) are member based grass root financial organizations offering credit savings and money transfer services to their members who are its shareholders.
It is currently estimated that about 50% of Kenya’s’ 33.1 million people live absolute poverty, with about 30% classified as extremely poor. An important condition for poverty reduction is the availability of a range of appropriate and accessible financial services for the poor particularly those in remote rural areas. In reaction to the failure of commercial banks and formal microfinance institutions to serve poor rural households, K-Rep Fedha Services promotes grassroots financial entities known as FSA’s to access financial services to their members who are also the shareholders of the FSA’s.
KFS provides the following support to FSAs
a) Capacity Building
KFS capacity building activities aim to improve the management and operational skills of FSA staff and board members. The capacity building support consists of:
- Training FSA staff in accounting, financial management, business planning, credit best practice methodology, portfolio management and delinquency control.
- Training of board members on good governance.
- Development of policies and operational procedures
b) Management Contract
Experience in implementing the FSA program has demonstrated that if unsupported, individual FSA’s only rarely prove institutionally sustainable. While local ownership and governance is maintained, KFS is able to exercise a greater degree of influence on the day-to-day efficiency of operations by retaining the FSA manager as an employee of KFS. A direct supervision of the manager enhances compliance with core operational procedures, allows more effective performance monitoring and contributes to checks and balances within the FSA. The last is especially important in the context of boards which frequently lack technical capacity and where shareholders are often in a weak position to exert effective oversight. At this stage the management contract route shows the greatest promise for developing sustainable decentralized financial intermediation based on the FSA model.
What does Management Contract Arrangement Offer?
KFS is offering management services to FSA’s through a largely pre-defined package. It makes considerations of the individual FSA requirements but controls the services in the interest of meeting client/shareholders needs and optimising profitability. KFS has hired managers and is responsible for clearly defined functions and performance standards.
The package includes the following key areas:
- Recruitment and supervision of the FSA Manager.
- Design and development of policy and procedure manuals.
- Design and development of management information & internal control systems.
- Development of appropriate monitoring and reporting tools.
- Developing and marketing of demand-led financial products.
- Treasury management.
- Co-ordinate internal and external audits
- Capacity building, strategic planning
- Loan portfolio and default management
- Development of an appropriate incentive system
- Develop and manage FSA annual budgets.
Branches
- Western
- Nyanza
- Bomet
- Kitui
- Makueni
- Taita-Taveta
- Lower Coast
Products offered by FSAS
Saving Accounts
- Current Accounts
- Educational Savings Accounts
- Associate Saving Account
- Fixed deposit Account
Group Based Loans
- Normal Loans
- Emergency Loans
- Educational Loans
- Agricultural loans
Money Transfer Facility
- Cheque Clearance
- FSA Cheque Sale
- Salary, Pension & Produce Processing
ablished 71 FSA’s in rural Kenya some in very remote areas.
