Industrialisation Cabinet Secretary Adan Mohamed told the sacco leaders’ convention at Laico Regency Hotel on Wednesday that the move to launch a centralised financing facility would enable groups to boost their capital reserves which will be used for expansion, innovation and also assist in initiating programmes that enhance value for members’ investments.
This means that banks could lose important loan business once the government establishes the fund where saccos can borrow money to meet their targets and obligations.
He said the soon-to-be-launched centralised financing facility would facilitate moneyed saccos to lend to low capitalised counterparts at affordable interest rates for onward advancing to members, thereby substantially reducing the heavy debt burden from commercial lenders.
This plan also seeks to directly raise funds from citizens through the sale of shares, thereby enabling them to realise the true value of their stake.
Mr Mohamed made the remarks in a speech read on his behalf by Ali Noor, Co-operatives Principal Secretary . He added that county governments need to reverse an emerging trend where sacco deductions for their employees are withheld, thereby having a negative impact on services rendered.
Kenya Union of Savings and Credit Co-operatives Ltd (Kuscco) Managing Director George Ototo welcomed the formation of partnerships between county governments and saccos to run credit schemes for low income earners saying that counties should should take into serious consideration the remittances delays as they are affecting various programmes negativley.
200 new Saccos are registered every month and control over Sh500 billion in deposits . With these figures in play, it is quite evident that Kenyans trust Saccos highly.