By Achola Mathews
Business people and members of Saccos have been cautioned against agreeing to guarantee loans for people they do not know well.
According to the lending laws, a guarantor is responsible for any loan recovery in case the client does not honour the terms of payment agreed upon at the time of lending.
Benedict Wekesa, the Chairperson of Ng’arisha Sacco, noted with the increasing number of defaulters members should be careful on who they guarantee.
“Many are agreeing to guarantee other even when they do not know them well only to get in trouble when their default paying their loans,” he said.
Wekesa was speaking this during a members training seminar that was conducted to educate members on proper utilization of loans.
Ng’arisha Sacco has been an outstanding financial institution formally comprising of teachers but opened common bond to business people and civil servants.
The Sacco CEO Wamukota Marklyne noted that the membership has greatly increased since opening of the common bond.
Wekesa called on members to use loans given wisely to generate more income.
“Some borrow for less important activities which they cannot plan on repaying and end up defaulting,” he said.
During the training youth were encouraged to start saving early for their future posterity.
Eli Kunikina from Kanduyi and Rosemary Makhanu from Tongaren, noted that saccos offer affordable credit compared to other institutions.