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The document explains that an increase in savings and share capital does not guarantee higher profits for a SACCO, as savings are liabilities and capital is equity. Higher interest expenses on savings and a decline in the loan portfolio lead to reduced profitability, despite a stronger financial base. Ultimately, effective management of funds through lending is crucial for maintaining profitability, as increased deposits without corresponding loan growth can result in a decline in net surplus.

Author

swaburahnabukeera028

Language

EN