Capital Markets

Saccos fight to survive as desperate members cash in subscriptions

saccos

The Co-operative Alliance of Kenya has launched a funds drive to help savings and credit societies (Saccos) in the horticulture, hospitality and Aviation industries adversely affected by the Covid-19 pandemic. FILE PHOTO | NMG

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Summary

  • The Co-operative Alliance of Kenya has launched a funds drive to help savings and credit societies (Saccos) in the horticulture, hospitality and Aviation industries adversely affected by the Covid-19 pandemic.
  • Chief executive Daniel Marube said the Co-operative Coronavirus Response Committee would solicit funds from co-operative societies, local and foreign well-wishers to cushion the affected saccos from imminent collapse.
  • He said the affected societies have suffered reduced incomes with members sent home and others forced to take a salary cut. This has seen an upsurge in withdrawals adversely affecting liquidity in the said saccos.

The Co-operative Alliance of Kenya has launched a funds drive to help savings and credit societies (Saccos) in the horticulture, hospitality and Aviation industries adversely affected by the Covid-19 pandemic.

Chief executive Daniel Marube said the Co-operative Coronavirus Response Committee would solicit funds from co-operative societies, local and foreign well-wishers to cushion the affected saccos from imminent collapse.

He said the affected societies have suffered reduced incomes with members sent home and others forced to take a salary cut. This has seen an upsurge in withdrawals adversely affecting liquidity in the said saccos.

“There is a concern by the management of the affected societies that their members are withdrawing savings to cater for their families’ basic needs.

“This trend, if not curtailed is likely to affect the liquidity levels of the societies and equally discourage the saving culture in the country,” said Mr Marube.

He added that sacco members should wisely use money and only borrow when necessary.

“Societies should also consider suspending interest repayments on existing loans during this period of economic downturn.”

Concorde Sacco chairperson Rosemary Ateka said they were processing at least 20 applications a week, with some members quitting.

Ms Ateka said most members said they needed urgent funds to cater for family expenses.

“Our 1,700 members from 15 airlines, over 100 travel agencies, 10 handling companies among other organisations and individuals had saved Sh504.9 million as of December 31 last year with members borrowing Sh462 million,” she said.

We are receiving not less than 20 applications from members wanting immediate access to savings,” she said. Mr Marube said CCRC will engage co-operative societies to activate contributions from corporate and social responsibility kitties to help ailing societies hard hit by the Covid-19 pandemic. “Societies must also formulate patient loans commensurate with the prevailing times. Co-operative business model is hinged on social concerns hence bear a human face,” he added.