By Charles Akivaga.
Savings and Credit Co-operative Societies (Saccos) will have to move with speed and align themselves with the changing legislations to remain competitive.
According to George Ototo, the Managing Director of Kenya Union of Savings and Credit Co-operatives (Kuscco) Limited, leaders of various Saccos will have to adapt to the new changes in the operating environment or face challenges.
He said Saccos should be alert to opportunities presented through legislation and other changes in operating environment if the movement is to remain on growth trajectory.
“As we approach 2017/2018 financial year, there are emerging issues that are likely to affect our businesses. We should respond appropriately,” said Ototo.
Speaking in Nairobi, the boss of the umbrella body for all Saccos in the country urged Saccos to develop Sharia compliant products to attract Muslim Community.
This is in response to the Proposed legislative amendment to Co-operative Societies Act and Saccos Act to strengthen Islamic finance business models. The bill will pave way for formation of Sharia compliant Sacco societies.
On interest rate capping law that came into effect in September last year following the amendment of Banking Act, Kuscco boss observed that it has resulted in slowed private sector lending.
Traditionally, Saccos have been lending through social guarantors. However, the President recently signed Movable Property Rights Act 2017 into law.
The Kuscco boss is urging Saccos whose credit policies demand collateral from customers for securing credit facilities to align their policies to this new law.