Cash crunch looms for Saccos as pandemic takes toll on sector, PS warns
Tuesday, June 30th, 2020
Majority of Savings and Credit Co-operatives Societies (Saccos) face low liquidity challenges with some feared they might totally close down following increased effects of Covid-19 pandemic
Co-operatives Principal Secretary Ali Noor Ismail said the effects of coronavirus have heavily impacted to the organisations as depositors are not regularly remitting monthly dues.
The liquidity levels erosion, he added, have further been caused by some depositors opting to withdraw their savings.
“Majority of depositors and especially small traders have been affected and thus not able to remit payments as per the agreement they with their Saccos,” Ismail said yesterday
He said majority of co-operative societies in travel, tourism and hotel, horticulture industries among other sub-sectors are grappling with liquidity challenges as level of business has gone down.
“The ministry is carrying out a study to assess impact of the Covid-19 in the cooperative societies,” he added.
The PS was speaking during the hand over of vouchers equivalent to Sh3.3 million to over 3000 members of small scale Saccos operating in informal settlement areas and low- income segments in Nairobi county.
The co-operative movement formed a Covid-19 response team to mobilise resources to assist the vulnerable members in the sub-sector.
Chaired by Francis Kamande chairman of national co-operative housing union, the team has so far mobilised Sh13 million from stakeholders in the movement.