Saccos will be allowed to clear cheques, issue LPOs, Chelugui reveals

Monday, January 16th, 2023 01:00 | By
Co-operatives to offer 3rd payment system
Co-operative and MSME Development Cabinet Secretary Simon Chelugui PHOTO/Courtesy

Co-operatives and Micro, Small and Medium Enterprises Development Cabinet Secretary Simon Chelugui says saccos will soon be granted an operational autonomy to help them improve service delivery to customers.

Chelugui (pictured) said the autonomy will be achieved through regulations that will create a Central Liquidity facility, effectively allowing saccos to own, offer and clear cheques.

The facility, according to CS, will also make it possible for the Saccos to clear and finance Local Purchasing Orders (LPOs), issued to their customers rendering various services mostly to government institutions.

Currently Saccos cannot own, offer or clear cheques as they can only do so with the help of mainstream banks.

LPO service is also a preserve of the banks, a regulation that saccos view as inhibitive.

Chelugui said that there is need to support and facilitate saccos considering their rapid growth and non-selective recruitment of members.

He noted that the 360 regulated saccos in the country hold an asset base of Sh1.2 trillion, a total deposit of approximately Sh1 trillion and a collective loans portfolio totalling to Sh890 billion.

“We have evaluated the great contribution of saccos to our economy and seen the need to upscale them by way of improving their services to their members. We will ensure they will have access to a central clearing house,”he said.

Chelugui was speaking in Nyeri at the weekend during the 47th annual general meeting of New Fortis Sacco that is predominantly owned by teachers.

He said the government will also help saccos come up with a common digital platform where they can track the financial conduct of each member before clearing them to access loans.

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