Saccos are turning out to be the biggest beneficiaries of the wait-and-see attitude adopted by banks even as the effects of interest rate capping on commercial lenders sinks in.
The situation has seen Urithi Premier Sacco increase it membership numbers thereby raising share capital within a short period of time.
“Banks are not lending to small enterprise owners and low income earners who they consider risky and unprofitable due to the interest rates cap.
"They are also cautious now that the country is in the electioneering period,” said Urithi Primier Sacco chairman, Mr Pius Thuku.
He spoke during the sacco’s inaugural Annual General Meeting in Thika last week, where he revealed that the sacco has managed to recruit more than 5,000 members and raise a share capital of Sh275 million over the last one year.
The sacco has registered 10 branches across the country.
“We are not at risk, our loans are insured and also our lending is dependent on what our members have saved.
"Our members are also guaranteed by other members who have savings within the Sacco,” he spoke of their precautionary measures.
“The only thing that we have seen slowing down is the monthly savings which could be attributed to the upcoming elections where people tend to keep money close to them in case of emergencies,” said Mr Thuku.