VISION 

 

Aspire to be world class MFI contributing to economically empowered and transformed society.

 

MISSION

 

Provide affordable, innovative and customers responsive financial services to rural and urban economically active people to improve their income

VALUES

The ‘ZI-CREDIT stands for:

  • Zero Tolerance: - commitment to fight fraud, embezzlement and rent seeking behaviours etc.
  • Integrity: - Exhibiting the highest levels of objectivity, accountability, honesty, transparency, fairness and responsibility at all times;
  • Customer Focus: - Placing the customer at the core of Company’s business and ensuring high quality services and inclusiveness;
  • Recognition: - Always recognizing and rewarding high performance/staffs and clients/  
  • Effectiveness: - Executing mandates effectively, ensuring delivery at least cost and in the shortest time possible;
  • Diligence: - Highest levels of proficiency and due professional thoroughness;
  • Innovation: - Adaptability, ensuring the optimum use of information technology and current financial novelty.
  • Teamwork: - Working in teams, building team spirit, cooperation, communication achieved  objectives in the set timeframes at all times;

 

MANDATE

  • Accepting both voluntary and compulsory savings as well as demand and time deposits;
  • Extending credit to rural and urban farmers and people engaged in other similar activities as well as micro and small-scale rural and urban entrepreneurs;
  • Drawing and accepting drafts payable within Ethiopia;
  • Provide micro-insurance business;
  • Purchasing income-generating financial instruments such as treasury bills and other short term instruments as appropriate;
  • Acquiring, maintaining and transferring any movable and immovable property including premises for carrying out its business;
  • Supporting income generating projects of urban and rural micro and small scale operators;
  • Rendering managerial, marketing, technical and administrative advice to customers and assisting them to obtain services in those fields;
  • Managing funds for micro and small scale businesses;
  • Providing local money transfer services;
  • Perform mobile and agent banking activities;
  • Engaging in other relevant activities;

 

 

ESTABLISHMENT

The chronological inception of today’s OCSSCO traces back to 1996’s rural project scheme that initiated to provide micro finance service (credit & saving) to farmers in Oromia National Regional State. On January 1, 1996 Oromia Credit & Saving Rural Schemes Development Project/OCSRSDP/ was established under Oromo Self Help Organization/OSHO/ to ensure accessibility of credit to the rural community. After two years, on August 4, 1997, the project was shifted to a microfinance institution and separately established as Oromia Credit & Saving S.C /OCSSCCO/. The successful achievements registered at project level and the issuance of national proclamation number 40/96 that for the first time laid legal ground for establishment of microfinance institutions were among major reasons that created conducive environment for the transition. 

LEGALIZATION

OCSSCO is a legally registered and licensed microfinance institution. It is registered by Ethiopian Trade Ministry and licensed by National Bank of Ethiopia (NBE).  

SHAREHOLDER & CAPITALIZATION

In the beginning the company was formed by five shareholders namely Oromia National Regional State, Oromo Self Help Organization, Dinsho Enterprise, Oromia Development Association and one natural person. Later, Dinsho Enterprise transferred its share to Oromia Forestry Enterprise and other six new shareholders including, Burayou, Bishoftu, Sebeta, Nekemte, Shashemene and Jima Municipalities have bought shares of the company.  Now, the number of the shareholders has reached eleven. The list of the current shareholders and their capitals are as follows.

S/N

Shareholder

Subscribed Capital

Paid up Capital

1

Oromia National Regional State

30,000,000

30,000,000

2

Oromo Self Help Organization (OSHO)

5,000,000

5,000,000

3

Oromia Forestry Enterprise

5,000,000

5,000,000

4

Oromia Development Association

4,000,000

4,000,000

5

Shashemene Municipality

20,050,000

20,050,000

6

Burayou Municipality

21,500,000

21,500,000

7

Jima Municipality

16,725,000

16,725,000

8

Nekemt Municipality

16,725,000

16,725,000

9

Sebeta Municipality

499,000

499,000

10

Bishoftu Municipality

5,000

500,000

11

One Natural Person

1,000

1,000

 

Total

120,000,000

120,000,000

 

TREND REVIEW: Operational, financial and human resource development performances

This trend review attempts to view about the operational and financial performances of OCSSCO during the last two decades. Though the company’s performances were obviously wide in scope and would touch variety of issues, this review only confined to the operational and financial activities performed; achievements and failures encountered by the institution. Therefore, trends of branch and client outreach expansions, credit supply and deposit mobilization, capital and asset formations have been included and presented as follows.

 

  1. Operational Performances Trend

 

  1. Branch Network Expansion Trend: - OCSSCO began its operation with four branches in four districts in Oromia National Regional State, namely Kuyu, Sinana Dinsho, Hetosa and Shashemene. As of today (April, 2019), the total number of company’s full fledged branches has reached 384 which are distributed in all zones of Oromia covering almost all districts (Aanaas).

 

S/N

Zone

Number of Branches by Zone

1.

Arsi

33

2.

Bale

22

3.

Borena

9

4

Buno Bedele

10

5.

East Hararge

23

6.

East Shoa

20

7.

East Wollega

25

8.

Guji

14

9.

Horo Guduru Wollega

16

10.

Ilu Aba Bora

17

11.

Jima

24

12.

Kellem Wollega

18

13.

North Shoa

19

14.

Oromia Special Zone Surrounding Finfine

20

15.

Southwest Shoa

16

16.

West Arsi

20

17.

West Guji

10

18.

West Hararge

15

19.

West Shoa

25

20

West Wollega

28

 

 

384

Table 1: Branch distributions by zone as of March 2019

 

The branches are structured into two: Regular Branches and Higher Micro Financial Service Branches. Most of the regular branches mainly focus on the provision of credit for rural clients for the purchase of agricultural inputs with modalities suit to them in order to enhance their productivity. Whereas all Higher Micro Financial Service branches and some regular branches work on urban financing that aims at job opportunity creation, urban poverty reduction and business developments with special attention to women and youth entrepreneurs.  

 

 

Graph 1: depicting the number of branches per year

 

 529. Client Outreach Trend: - OCSSCO began its operation with limited numbers of farmer borrowers counted as 1,529. As the company devoted to expand its branch networks, it has also registered growth in client outreach.

 

With all its current branch networks, the company is now serving about one million borrowers annually. The trend of OCSSCO’s performances shows, in average, the company has been serving 374,305 borrowers yearly; while the total totting up of borrowers in the last 21 years is 7,860,397. The compositions of these borrowers were farmers, unemployed women, youths, graduates and urban dwellers, women entrepreneurs and employees who all were screened for willing and capability to work with the credits.  

 

The trend demonstrates that the number of borrowers was yearly augmenting by 55.4 percent in average. But, these increments cannot be taken as pleasing when compared against the wide demands and potentials in the region.   

 

 

 

 

 

Graph 2: depicting the number of borrowers per year

 

 

  1. Disbursement Trend: - The size of OCSSCO’s portfolio has been considerably growing for the last two decades. At its beginning, the company’s portfolio was only 815,926 ETB. The volume has now grown in billions as it is registered 6,713,027,342.17 ETB on June 30 of 2018.

 

 

   Graph 3: depicting the amount of loan disbursement by year

 

 

The objectives of the loans are obviously to bring about economic growth and improvements of borrowers’ livelihoods. This gradually leads to ensure fair, equitable and balanced economic growth and mutually benefiting relationships between citizens and promote stability. Therefore, the loans disbursed mainly to attain these objectives.

 

The purposes of the loans disbursed in 2017/18 presented below can be good example.  

Purpose of loans

Amount disbursed

Share out of the total disbursement %

To enhance farmers' productivity and agricultural productions through financing the unbanked farmers in the region

4,340,006,772.00

64.65

To create job opportunities to unemployed citizens particularly youths and women through financing capital 

1,681,437,897.95

25.05

To assist business starters, business runners and entrepreneurs to start up, expand and/or accelerate their businesses accessing adequate financing

143,501,757.00

2.14

To support employees build asset particularly home accessing mortgage/housing loan 

511,049,733.75

7.61

To fund HIV Victims, who are capable to work, to enable them generate incomes and afford better livings

10,381,530.00

0.15

To finance people in drought affected areas to work with alternative businesses, build assets and cope up drought effects and bring economic improvement.

21,529,000.00

0.32

To finance Expansion of Renewable Energies in rural areas where unreached by electric power.   

3,360,651.86

0.05

To finance rehabilitation loan for returnees from refugees

1,760,000.00

0.03

 

6,713,027,342.17

100

 

Table 2: loans disbursed in 2017/18 fiscal year by purpose

 

  1. Repayment Trend: - The trends of OCSSCO’s repayment rate are one of performances that can be considered as healthy. For the last 21 years, OCSSCO’s Portfolio at Risk (PAR) is 2.63 in average or its annual average repayment rate is 97.37%. The maximum and minimum ranges between 100% and 93.11%. The highest (100%) repayment rate was registered in the fiscal years 1997/98 and 1998/99 while the least repayment rate (93.11%) registered in the fiscal year 2017/18. The average repayment rate can be referred as healthy though the trend indicates the rate is recently deteriorating. And if this keeps on going and counteractive measures aren’t undertaken; inevitably the healthiness of the company’s portfolio will be below par.            

 

Graph 4: depicting repayment rates by year

 

  1. Saving Mobilization Trend: - OCSSCO gives due attention to saving since it is irreplaceable source of the institution’s finance. As the company’s report of 2017/18 shows, saving covers around 80 % of loan amount disbursed /saving to loan ration/ during the year. It is also a mission of the company to contribute for poverty alleviation through enhancing the saving culture of the society. The company has been, therefore, aggressively working on saving by ensuring accessibility of the service and diversifying its products. Consequently, significant growth has been registered.

Graph 5: depicting the amount of savings mobilized by year

  1. Financial Performances Trend
  2. Capital growth trend: - Initially the authorized capital of OCSSCO was Birr 60,000,000 and the subscribed capital was Birr 20,000,000 out of which Birr 6,950,000 was the paid up capital with which the company started its operation. Now the subscribed and paid up capital is grown to 120,000,000.

 

In addition, the company is escalating its capital accruing its profits from time to time. The company adds its annual profits to its capital so that it strengthens its lending capacity and reach more needs. Obviously, dividend isn’t paid to shareholders as they agreed to capitalize and assist company accomplish its mission of reaching more to improve their economic bases and livings.  

 

Therefore, the total capital of the company is now Birr 2.23 billion as of June 30, 2018. The capital formation trends of the institution for last two decades look like as follows.  

 

 

 

 

      Graph 6: depicting capital growth by year

 

  1. Asset growth trend: - By 1997, the company had both liquid and fixed assets estimated to Birr 9.8 million. As of June 30, 2018, the amount has grown to around 12.2 billion.           

 

 

      Graph 7: depicting asset growth per year

 

  1. Profit & Loss Trend: - OCSSCO is a government affiliated microfinance institution which intends to alleviate poverty through increasing financial accessibility to the unbanked particularly the poor and strengthening their economic base and livings. To this end, the company is formed by lion share of Oromia National Regional State (ONRS) and other ONRS’s organizations and municipalities which shared the mission and interested to contribute in the poverty alleviation activities in the region. Therefore, these shareholders agreed not to take the dividends rather it’s accumulated as capital and re-disbursed to the society.

 

However, the trends (yearly accrued profits) can be seen as follows.  The trend shows, in the past 21 years, the company has registered rising profits except minor losses encountered during 1997/98, 1999/00 and 2002/03.

      Graph 8: depicting profit & loss trend by year

 

  1. Staffing and human resource development: - Manpower is a backbone for organizational growth and sustainability. OCSSCO started its operation with 29 staffs among which 9 were at head quarter and 20 employees were at the first four branches. As the company extend its structure and rigorously worked on outreach expansion, the number of staffs significantly increased. As of June 30, 2018, the company has 5,543 employees. The number of staffs has grown by 276 averages in the last two decades. This shows how much the company absorbs unemployment in the region.

 

Human resource development is also a key activity that the institution considers as a path to create competent and sustainable organization. Therefore, the company always works to its utmost capacity to have quality and competent manpower at each level of its structure. Accordingly, it undertakes various manpower development endeavors including capacity buildings. More or less, this effort has helped the company build competent and worth staffs.