I would like to pass my sincere gratitude to the almighty God for granting me much favor in terms of health and wisdom. Much appreciation also goes to my Course Instructors, Head of Department for his much guidance, support and encouragement to make my Industrial Attachment Report writing a success. My appreciation also goes to my friends for their assistance in elaboration of some conflicting issues. Table of Contents CHAPTER ONE: INTRODUCTION 1. 0 BACKGROUND Faulu Kenya Deposit Taking Micro-Finance Limited is a limited liability company duly incorporated in Kenya under the Companies Act.
The company changed its name to Faulu Kenya Deposit Taking Microfinance (DTM) Limited in 2008 as part of the requirements to obtain the Deposit Taking Licence from the Central Bank of Kenya. In May 2009, Faulu became the first registered DTM in Kenya under the Micro-Finance Act and is regulated by the CBK. Faulu was founded by Food for the Hungry International (FHI),a Christian relief organization, Loan scheme program that targeted the economically active poor in Mathare.
From its humble roots as a loan scheme in 1991, Faulu is currently one of the top Deposit Taking MFIs in Kenya have successfully developed a platform aimed at banking the previously unbanked though a variety of savings, credit, micro insurance and mobile banking solutions. 1. 1 COMPANY’S VISION AND MISSION STATEMENT 1. 1. 1Vision statement Giving Kenyans hope and a future. Giving – Proactively seeking to enrich others through service. Kenyans – Belief in our people’s potential, home-grown indigenous solutions for Kenyans by Kenyans. Hope- Motivation for optimism.
A Future- Facilitate the fulfilment of Kenyans’ aspirations and dreams. 1. 1. 2 Mission statement. To listen and empower Kenyans by providing relevant financial solutions To Listen- Actively engaging others with a view to know them better hence meet their needs To Empower- Going beyond financial services by equipping with knowledge, skills and reaching out through VOC. Relevant Financial Solutions – Financial products and services that respond to customer needs. 1. 2 OBJECTIVES OF FAULU MICRO-FINANCE BANK LIMITED a. To enhance country’s economic growth. b.
To improves socio-economic status of the community. c. It creates employment for the rural-urban population hence minimizing rural-urban migration. d. To decentralize industries and increase the Kenya’s GDP. 1. 3 CORE VALUES OF FAULU MICRO-FINANCE BANK LIMITED a. The Lordship of Jesus Christ. b. Listening. c. Learning. d. Excellence. e. Integrity. 1. 4 FUNCTIONS OF FAULU MICRO-FINANCE BANK LIMITED a. A variety of savings. b. Credit services. c. Micro insurance services. d. Mobile banking solutions. e. 1. 5 ACHIEVEMENTS OF FAULU MICRO-FINANCE BANK LIMITED
In 2013 Faulu was ranked the best organization in Financial Reporting Excellence Awards 2013. This was after thorough scrutiny from recognized audit firms, experts and regulators. Faulu has demonstrated a track record of enviable growth in its assets and loan book. Faulu Kenya has grown tremendously over the last 20 years from a single MFI office in 1991 to over 90 service outlets which include 27 banking branches in seven of the eight provinces in Kenya by end of 2011, with various strategic partnerships that make its financial services available countrywide.
Faulu Kenya DTM has created a strong brand in the Deposit Taking Microfinance Industry and continues to strengthen its presence in the market in a deliberate effort to grow its banking business. Faulu envisions to be a market leader through diversified products, wider distribution networks, strategic partnerships and affordable pricing due to reduced costs and cheap deposits from its banking business. 1. 6 CHALLENGES FACING FAULU MICRO-FINANCE BANK LIMITED BUNGOMA BRANCH. a. Stiff competition from neighboring banks and micro-finance companies like Kenya Commercial bank and Kenya Women Finance Trust.
First mover disadvantages in the market. c. Resource mobilization and effective utilization. 1. 7 PRODUCTS $ SERVICES OFFERED AT FAULU MICRO-FINANCE BANK LIMITED BUNGOMA BRANCH. Faulu offers both credit and savings products that suit your different financial needs a. Savings Products b. Credit Products c. Micro Insurance d. Kopa chapaa e. Faulu Popote Service 1. 7. 1 SAVINGS PRODUCTS Faulu savings accounts are easy to open and operate regardless of your location through their branch network, ATM services, Mobile-banking and their agents.
The products include; a) Hazina Account An ideal solution for meeting a client’s day-to-day financial commitments and emergencies. With the Hazina Account one will enjoy the following:no monthly ledger fees,unrestricted deposits,unlimited withdrawals,competitive interest rates and 24-hour access to your money. b) Hazina Plus Account A pure savings account to enable you to accumulate your savings and achieve your life’s aspirations. The Hazina Plus Account is affordable and convenient to operate.
Other benefits include:no monthly ledger fees,no account maintenance fees,competitive interest rates and free quarterly withdrawals over the counter. c) Hazina Junior Account A minor account for young savers to meet current and future needs. Advantages are; no maintenance fees,an affordable piggy bank for child’s home saving ,competitive interest rates,free atm card for deposits only,free bankers cheque for school fees . d) Lengo Account Lengo Account allows you to save towards specific short, medium or long term goal within an agreed time period.
This could be build up of business capital, school fees, purchase of assets, occasions such as weddings etc. The advantages are; automatic access to up to 80% of your savings as a loan at an affordable interest rate without breaking your contract, premium interest on your savings and financial advice to meet your goals. e) Faulu Faida Account Faulu Faida Account is a high earning account for: employed and self-employed individuals ,institutions ; parastatals, schools, churches, ngos, investment groups, companies, county assemblies.
Faulu Faida Account is available as call or fixed deposit option . Benefits of Faulu Faida Account • High yield savings account- up to 12% interest rate • One has options to invest their money from as short as minimum of 7 days up to 36 months. • Deposits from Ksh 5,000 to millions to enjoy the returns • Emergency credit of up to 10% of the invested amount. • Free funds transfer when needed. • Safe place to keep your money – Faulu is licensed by Central Bank of Kenya. • Convenient account opening process- Faulu agents can even come to your location
Maisha Account A unique savings account that comes with the benefit of a life cover. Benefits are: automatic access to a loan, three times your savings, you can save as little as kshs 70 weekly, annual life and benevolence cover, atm card to make deposits and competitive interest rates . g) Fanisi Account -Self Enrollment Service The Faulu Fanisiself-enrollment account is a unique service from Faulu Kenya that gives the client the convenience of opening an account on their mobile phones by providing their credentials and receiving an account number before visiting any Faulu outlets.
Benefits of the Fanisi Account; easy self-enrollment process, secure place to save, affordable – no ledger fees , flexible – can deposit any amount. h) Faulu Chama Account Faulu Chama account: Savings account for formal and informal groups with the aim securing and preparing for investment opportunities. Faulu chama account has a membership of 5 and above. Key product benefits; safe place to keep your money, faulu is licensed by central bank of Kenya, easy account opening requirements, competitive interests rates on your chama money of up to 5% p.
Access to cheque books and bankers cheques. , no monthly ledger fees, no account maintenance fees, chama loan of up to 10 times cumulative chama savings up to 300 million, access to individual loans for chama members against chama account, two free statements in a year on request , low interest rates on loans of 1% p. m. and flexible repayment plan of up to 6 years. 1. 7. 2 CREDIT PRODUCTS a) Business Loans 1) Mkopo Biashara This is a business working capital loan designed to facilitate your growth, expansion and the upgrade of your business.
Benefits; grace period, interest reduction for customers with good repayment history, top-up facility available, convenient repayment plan, loan amounts from as little as kshs 1,000. Type of Loans Maximum Amount Maximum Loan Term Daraja 1 Kshs 100,000 Up to 12 Months Daraja 2 Kshs 100,000, 000 Up to 24 Months 2) SME Loan Business Loans of up to Ksh 50M for individuals and businesses that can be used for Working Capital: To expand your business and provide capital for your operations.
LPO financing: To provide your business with short term financing to undertake tender awarded projects or supply goods and services. Asset Financing: To help you or your business to acquire assets such as a personal car or light duty commercial vehicles, tractors, plant and machinery for light industries. Import and export financing: To facilitate your export and import business by accommodating any funding gaps in your trade cycle. Insurance Premium Financing: To allow you to pay insurance premiums. b) Consumer Loans 1) Mkopo Maisha Bora
Mkopo Maisha Bora is a multi-purpose loan that is geared towards improving your lifestyle and business operations. Benefits: affordable interest rate, a cheque is written to your supplier, convenient repayment terms, no penalty for early repayment. 2) Mkopo Elimu An educational loan to meet education and training needs for you and your family. Benefits: flexible loan amounts, quick loan processing, convenient repayment plan, affordable interest rate and cheques done in school/college name. 3) Pesa Chap Chap An instant SMS-based loan to meet emergencies with a 10 day repayment period.
Benefits: application is convenient through your mobile phone, affordable interest rate,no need for a guarantor and no penalty incurred for early repayment. c) Agri-business Loans 1) Ufugaji Bora A loan facility for farmers engaged in livestock farming to increase productivity through purchase of dairy cows, animal feeds, and expansion of your dairy project. Benefits:, top-up facility available, affordable insurance for the livestock, training on livestock farming as a business, affordable interest rate and flexible repayment plan. 2) Nafaka This is an agricultural loan designed to finance all your farming needs and activities.
Benefits: affordable interest rate, convenient repayment plan of up to 12 months, affordable crop insurance against crop failure, training in farming as a business and quick loan processing. d) Personal Loans 1) Daraja ya Mshahara This is an unsecured salary advance for salaried customers. Benefits: top-up facility available, convenient repayment plan of up to 12 months, quick advance processing and affordable interest rate. 2) Mwezi Kona Advance This is an unsecured salary advance for customers to meet emergency needs. Benefits: amounts from as low as kshs 500. instant advance processing and affordable interest rate. e) Faulu Chama Loan
Faulu Chama Loan Purpose To enable formal and informal groups such as chamas, self-help groups, welfare groups, Partnerships create wealth through investments Investment groups who have a Faulu Chama Account for wealth creation and welfare activities of its members. Chama members will range from 5 and above Benefits A loan of up to 10 times chama accumulated deposits , up to Kshs. 300 million Competitive interest rates of 1% p. m A repayment period of up to 72 months. Minimum loan of Kshs 50,000 The loan is accessible to registered and non-registered groups LPO financing for group business contracts and business opportunities.
Members access to individual loans Members access to Faulu’s affordable medical and life covers at discounted premium rates. Access Requirements At least 10% savings in Chama account Copies of I. D. and PINS for the officials List of all group members, their contacts (including physical address) and their business activity Three months prior banking history to Faulu or any other bank 1. 7. 3 MICRO INSURANCE Faulu Afya is a comprehensive healthcare insurance plan for you and your family against financial emergencies during illness, surgery and accidents.
Premiums can be paid for in cash through our branch network or financed as a loan. Eligibility Any individual who holds a Savings or a Loan Account with Faulu Kenya Categories The Faulu Afya cover offers unlimited outpatient services & inpatient limit of up to Kshs 200,000. Benefits of Faulu Afya Cover include: Affordable premium rates, custom made for families Unlimited outpatient services in selected hospitals and clinics In-patient hospitalization Accidental dental cover Accidental optical cover Road and air evacuation Life cover for the customer Funeral expenses Covers chronic and pre-existing medical conditions
No tests required 1. 7. 4 KOPA CHAPAA Introducing Kopa Chapaa with Faulu Kenya and Airtel Money Kopa Chapaa is a convenient 10 day loan available to AirtelMoney Customers for low-value cash emergencies in partnership with Faulu Kenya. Who is Eligible? Active AirtelMoneycustomers for at least 6 months with a good credit history. How does it work? The KopaChapaa allows Airtel Money customers to apply for a loan from the convenience of their mobile phones. Airtel Money customers can borrow from as little as Ksh 500 to a maximum of Ksh 10,000 to be paid back within 10 days.
On the due date, the money will be automatically deducted from the subscriber’s Airtel Money account. In case the balance is not sufficient, the balance of Airtel Money will be deducted automatically upon the receipt of cash. Benefits: Quick cash advance on your mobile phone of up to Kshs 10,000 Affordable interest rate Convenient repayment terms 1. 7. 4 FAULU POPOTE Faulu Popote is a trendsetting “Borderless Banking” solution that achieves financial inclusiveness for the unbanked in the most efficient way and provides unmatched convenience as well as cost economy to the unbanked.
Faulu Popote Service is a technological innovation that provides financial services integrations seamlessly to accord unmatched convenience to bank customers in the market. Key aspects of the service include: Branchless Banking Faulu customers can open accounts and get 24/7 access to savings and credit services regardless of their mobile network subscriber. The service is delivered through Faulu staff in the field and entails, savings account opening, client and group registration, ATM card request, mobile banking registration, micro deposits, client SMS and customer enquiries. Mobile Banking
Faulu Popote incorporates the M-banking platform that is popular due to it’s convenience and timeliness. This gives customers unmatched benefits such as: money transfer – inter-accounts and integration to all mobile networks, automatic and instant loan applications, approvals and disbursements, automated or one off Loan repayment, full banking transactions – mirror physical branch, SMS platform for customer interaction and 24/7 Customer Service. Agency Banking Faulu Popote has taken advantage of the governments’ initiative to develop the ICT sector as well as enabling financial sector environment to set pace into agency banking.
On the Faulu Popote platform, there is no limit to the number of agents the company can deploy. Currently, Faulu is already providing real-time banking services countrywide. The company intends to bring on board several agents who are already earmarked once the CBK releases the prudential guidelines on agency banking for microfinance institutions. Faulu Popote allows the masses to be incorporated in the efforts of outreach of financial services without the need of a bricks and mortar structure. The solution captures the realities of the different Kenyan community set ups by localizing banking.
Worked in the correct legal framework this provides immense benefits through: Faster and deeper financial services outreach Financial services inclusiveness to the unbanked Employment creation to the many agents that come on board Economic development Transformation of lives Savings funds Investment growth Reduction in costs Enhanced financial education 1. 8 OBJECTIVE OF SETTING UP FAULU MICRO-FINANCE BANK LIMITED BUNGOMA BRANCH. Faulu Kenya provides a secure place for Kenyans to put their savings
And access them conveniently through our widespread network of branches, ATM’s and their mobile phones. Our officers are always ready and within reach to give you financial advice on how to: Develop a savings plan Budget for it Achieve a saving lifestyle 1. 9 COMPANY COMPETITORS Post bank,KCB,Cooperative bank,DTB,Standard Charterd bank,Equity bank,KWFT,Family bank, Barclays bank,National bank,K-Rep bank,Bank of Africa and other micro finance companies. 1. 10 ORGANISATIONAL STRUCTURE OF UP FAULU MICRO-FINANCE BANK LIMITED BUNGOMA BRANCH.
Organizational structure is founded on the most economic matrix best suitable for the organization which can accommodate appropriate numbers of employees and provide for downward and upward linkages. Faulu micro-finance bank limited bungoma branch has a target of maximizing productivity and minimizing costs of production by positioning appropriately educated personnel into jobs provided. At the top we have the branch manager who gives overall policy directions to the branch business. Below are three heads of departments heading the three departments which include; i.
Operations department; ensures proper management and operations of branch activities. ii. Marketing $ Sales department; provides sales and marketing services for company products. iii. Credit department; ensures the adherence and compliance to the credit requirements. Manages the credit risks involved at the branch level as well as loan recovery. Fig 1:The organizational structure of Faulu Micro-Finance Bank Limited Bungoma Branch is shown below; CHAPTER TWO: ANALYSIS OF OBSERVED DATA AND INTERPRETATION OF COURSE OBJECTIVES 2. 0 Introduction During my attachment in credit and operational departments.
I was enrolled to the specific theoretical and procedure manuals and work instructions or tasks undertaken before I engaged in practical work. My supervisor was keen on ensuring that I acquire all the practical aspects in all sections of this department. 2. 1 Role of Credit Department The main role of credit department is to manage the bank branch credit risk, accurately and timely prepare credit reports and present and acknowledge them as far as the department is concerned. This are then presented to the management for decision making. It is headed by the Senior Relation Officer (SRO).
2. 2 Objectives Of Credit Department a. Portfolio growth and management: Recruit and retain clients ensuring a growth in loan disbursement through excellent customer service and timely service delivery. b. Deposit Mobilization: Mobilize deposits to match and exceed the loan book. c. Loan processing: Ensure thorough business assessment, proper securitization and compliance to audit standards and company policy. d. Client education: Disseminate accurate information to prospective clients and ensure their understanding of operations policy as well as training them on group leadership.
e. Loan book quality management: Ensure that all loans given are timely paid in compliance to policy and statutory requirements. f. A link with the public: Liaise with local administration, maintain relationships with the public and portray company values at the marketplace 2. 3 Role of Operational Department The main role of operational department is to manage the general bank branch activities, accurately and timely prepare operational reports and present and acknowledge them as far as the department is concerned. This are also presented to the management for decision making.
It is headed by the Branch operation supervisor (BOS). 2. 4 Objectives of Operational Department a. To ensure quality customer service delivery through the provision of efficient and effective branch operations, while ensuring conformity with the bank’s laid down procedures/processes and regulatory guidelines b. Ensure proper documentation for all branch transactions and authorization of transactions within approval limits c. Supervise account opening process and ensure full compliance to the KYC policy d. Ensure effective branch cash management e.
Maintain strong control awareness in branch and ensure adequate departmental controls are in place for all products/processes. f. Ensure zero fraud tolerance / error rates and zero regulatory infraction g. Ensure maintenance of appropriate confidentiality and security of customer and transactional information and safety of bank branch assets. h. Provide timely and accurate reports (institutional and regulatory) on Branch Operations in prescribed formats and intervals. i. Coaching and Managing staff in the Branch Operations Team to ensure a high performance and a fully engaged team. 2.
5 Role of Sales/New Business Development Department The main role of new business development department is to work to improve the organization’s market position and achieve financial growth. It is headed by the Branch Team leader. 2. 6 Objectives of Sales/ New Business Development Department a. To identify, recruit, induct, train and motivate new agents and brokers b. To follow up on renewal business and ensure 100% renewal c. To undertake marketing intelligence function on the current market condition by carrying out research on existing market policies and trends in area of operation d.
Manage existing clients and ensure they are satisfied with the services e. Grow and retain existing accounts by presenting new solutions and services to clients f. Submit progress reports and ensure accuracy of the data g. Ensure targets are achieved CHAPTER THREE: ANALYSIS OF WORK EXPERIENCE DURING THE ATTACHMENT PROGRAME. 3. 0 ACHIEVEMENTS DURING ATTACHMENT a. Accountability and accuracy. By performing different tasks under the credit,operation and sales departments, i have been able to improve on accountability and accuracy in line with posting data into the system and making informed decision.
b. Management knowledge This is through the importance of proper planning, coordination, organizing and controlling resources in order to achieve set goals and objectives. c. Adaptability. I was able to interact properly with the staff in various departments and got the necessary practical skills i required basing on what i had been taught in class, the course work was relating with what the company does in terms of risk management ie credit risk and operational risk. 3. 1 OBJECTIVE OF MY ATTACHMENT.
As an actuarial trainee, the core objective of my attachment is to learn and comprehend on how risks are managed and making of critical decisions. 3. 2 CHALLEGES FACED DURING THE ATTACHMENT PERIOD. Delay to report to some sections as scheduled due to inadequate follow ups by the training centre on attaches to ensure they are in the required sections. Attaches absenteeism as a result of some commuting long distances. Congestion in office due to the small size of offices and large number of staff, these led to straining the available resources like computers, furniture among others.
Limited exposure by trainees due to employee workload in most sections. Inefficient coordination by the university department for attachment since there was no an assessor from the university. 3. 3 CORPORATE SOCIAL RESPONSIBILITY PROJECTS BY FAULU BANK. a. Establishment of the new open office system though it was a government requirement. b. Training of employees through seminars. CHAPTER FOUR 4. 0 RECOMMENDATION TO THE FINDINGS Supervisors from respective sections should ensure that all students adhere to their attachment programmes.
Training center should facilitate smooth flow of students operations by providing them with stationeries. The management should increase on office stationeries such as photocopiers, printers and computers for smooth flow of work. However, the management should try and identify other loop holes in terms of employee motivation to ensure that they are perfectly motivated to work with a lot of comfort. Relying on qualified personnel and not merely experienced personnel this will enable them to minimize on avoidable expenses. 4. 1 SUMMARY OF THE REPORT
In summary Faulu bank has demonstrated a track record of enviable growth in its assets and loan book. Faulu Kenya has grown tremendously over the last 23 years from a single MFI office in 1991 to over 90 service outlets which include 27 banking branches in seven of the eight provinces in Kenya by end of 2011 and now 108 service outlets which include 47 branches with various strategic partnerships that make its financial services available countrywide. Faulu has partnered with the Old Mutual Insurance company which has invested over ksh. 30 billion to enhance the growth of the banking services.
Also Faulu Kenya limited bank has changed its name to Faulu Microfinance Bank which is a clear sign of growth and change of tactics to achieve the set goals. 4. 2 CONCLUSION I would like to thank the Almighty for granting me good health and protection throughout my attachment. The entire attachment has been a great success and great exposure. Faulu Kenya limited Bungoma staffs have been co-operative and supportive towards my attachment by sacrificing their time and resources available to share with me this opportunity which has helped me gain the necessary practical skills relevant for work after study.