By James Wakahiu
Financial institutions all over the world are crippled by people who secure loan but fail to repay them, Thika West Sub-County Deputy Director of Co-op Development Catherine Mbuki has said.
Speaking to members of Urithi Premier Sacco in Thika, Mbuki said defaulters had led to the collapse of many Saccos in the country.
“This is a very serious illness. Be it bank, Sacco or micro-finance, they all collapse due to loan defaulters”, she said.
She said last year had its own challenges but that should not be an excuse.
She said no right thinking member had joined Sacco anticipating it to collapse.
She said if all those who had taken loans serviced the same, interest and dividend would shoot and while the sacco expanded.
“If you pay loan and interests in time, next year you will pocket a better dividend,” the Co-op boss said.
She said apart from dragging the Sacco backwards, defaulters also led to low dividend and deposits interest rate.