Coop Commissioner: Target youth market or perish


Jan 7, 2017

Gichuki also asked Saccos to incorporate youth and women in their leadership structures as a way of boosting membership from these two groups.
Speaking during an Exclusive interview with the Sacco Review, Gichuki further called on County governments to maximize their support to cooperatives in their respective counties.
“We know most Saccos have rebranded but by the law, they remain domiciled within the counties they are headquartered and thus they should enjoy support from their parent County governments to grow,” noted Gichuki.
He said while the National Government was not directly supervising activities of cooperatives at the counties, it was engaging County Cooperative Directors for the general well being of the sector.
“We at the National Government are dealing with policy formulation, guidelines and standards but the -day -to day running of cooperatives in the counties rests with county directors. The tribunal was now however devolved and its as active as before,” explained Gichuki.
He said the Government was also tough on employers not remitting Sacco deductions to respective Saccos. “On remittances, Section 35 of the Act is very clear. We freeze accounts of those that do not remit deduction within the stipulated time frame,” noted the Commissioner.
At the same time, Gichuki called on Saccos around the country to reduce their interest rates as per the Central Bank of Kenya (CBK) capping.
“ We know some Saccos have already reduced their loan rates to retain their competitive edge after banks were forced to cut price of lending in line with the new interest capping law. However, those yet to do so should follow suit because they risk losing business,” added Gichuki.
For long, Saccos had kept interest rates at an average 12 per cent per annum (far below bank rates) and that over the years has been their biggest selling point, earning them steady business.
However, with the capping of bank interest rates, now at 14 per cent, Saccos that had priced their loans at as high as 24 per cent are reviewing their price downwards.
Among those that have reduced the rates include Coast-based Bandari Sacco, Nakuru based Cosmopolitan Sacco and Nairobi based Mwalimu Sacco. Mwalimu, however, remains above the 14 per cent rate cap, with its FOSA’s 24-month advance loan product coming down from 24 per cent to 18 per cent.
Mwalimu has lowered its Fosa 12-month advance from 18 per cent to 15 per cent and its business loan for individuals from 17 per cent to 15 per cent.
A good number of SACCOs have, however, adopted a wait-and-see approach fearing that adjusting the loan cost mid-year could negatively impact on their budgets.

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