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The responses are based on the old scheme (as at 30th June 2018)

What is benevolent fund?

This is a member’s self insurance scheme whose objectives include:

  1. Serve as a self insurance cover for members’ deposits and loans upon death
  2. Assist next of kin on funeral expenses
  3. Assist contributor on funeral expenses of nominee as prescribed in the nominee form
  4. Relieve the Sacco from settling death claims from its surplus

How much does a member contribute?

At the moment every member contributes shs 100 per month. The figure can be reviewed from time to time depending on the loan portfolio as it is the one used to pay insurance premiums for loans held by members.

What does the fund cover?

  1. The fund covers burial expenses for the deceased members @ shs 20,000=
  2. It also covers burial expenses of deceased nominees @shs 15,000=
  3. There are exceptional cases where both the contributor and the nominee to burial fund pass on at the same time (eg in case of car accident) a total of 35,000= is payable
  4. Outstanding loans held by deceased members are settled

The amounts are adjusted from time to time to be in line with the current economic realities

Who are the beneficiaries and how much.

The beneficiaries are:

  1. The members who are paid shs15,000 following death of their appointed nominee,
  2. Nominee who is paid shs 20,000= following the death of the member
  3. The nominee is not required to settle any outstanding loan held by the member as at the time of death, it will be settled by our insurers

How are the refunds calculated upon leaving the SACCO?

Refund is subject to a member not having benefited from the fund at the following rates:

  1. Have contributed between 4 to 36 months @ 25% of the total contributions
  2. Have contributed for more than 36 months (ie 37 moths and above) @ 50% of the total contributions

Why can’t the fund stand for children?

The fund caters for one nominee to the burial fund at the moments. The nominee can be either your child or spouse. Ideally the fund is intended to cover the risk and in our circumstances the loans held by members constitute the risk, the member there becomes the insured. The burial expenses cover is a rider benefit

Over time however members have been requesting for a review of the monthly contributions in order to cover more nominees and in particular children. The office having made due diligence considerations, a report was tabled at this year’s ADM and approved giving rise to the new changes effective 1st July 2018.

What challenge is one likely to encounter while running the fund?

Members are not likely to encounter challenges while contributing to the fund, to the contrary the above “benefits” are at their disposal.

The Sacco is however likely to encounter challenges if deaths increase as more burial expenses will be incurred. As the gross loan books increases so are the annual premiums to cover the said loans. The shs 100= per member per month is therefore not adequate to settle insurance premiums for our loansthat are now more than 1.2 billion. Additional nominee will deplete the fund further.

Based on new scheme (after 1st July 2018)

What key changes come with the new scheme?

The objectives of the fund remain but the benefits increase.

The monthly contribution of shs 100= will continue, but no proportionate refund will be due on leaving the Sacco for contribution received with effect from July 2018. The applicable proportions for contributions of up-to June 2018 will be transferred to share capital of either Mwito Housing or Mwito Sacco subject to a member’s confirmation. Preference will however be given to Mwito Housing as recommended by the ADM

The fund will now cover the Member (principal) and 2 nominees (dependants). The number will be reviewed from time to time depending on the sustainability of the fund:

i).  The payment due on death of a member has been increased from shs 20,000= to shs 50,000=

ii) The payment due on death of a nominee has been increased from shs 15,000= to shs 25,000=

iii)  Previously a maximum of shs 35,000= will be covered (20,000= + 15,000=) but under the new scheme a total of shs 100,000= will be paid (50,000= + 25,000= +25,000=)

Members will have to update their nominee forms to cater for the new changes, use New Nominee Form – 2018” which is on our Website.

Emerging issues

It is observed that a number of our members are not privy to the operations of the Burial and Benevolent Fund Scheme, the introduction of changes therefore compounds the problem. As the office strives a convenient way of addressing the issues, our delegate across the country are encouraged to update members within their branches.


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