- Middle East conflicts expose tea and coffee Saccos to financial risks
- Farmers could face pressure on loan repayments and savings
- Diaspora members may also be affected by job and income disruptions
Saccos serving tea and coffee farmers have been warned of possible financial risks arising from conflicts in the Middle East. Disruptions to crop markets could affect members’ ability to repay loans and save.
The 2025 Sacco Supervision Annual Report identifies emerging conflicts in the Middle East and Eastern Europe as a potential risk to Saccos whose members depend on markets in the affected regions.
It notes that a number of Saccos draw their membership from farmers involved in crop production, particularly tea and coffee, whose main markets are normally in the conflict areas.
Any negative impact on market access for the crops could, in turn, affect farmers’ ability to repay loans taken to finance production as well as their capacity to save, according to the Sacco Societies Regulatory Authority (SASRA).
READ ALSO:
However, the risk extends beyond farmers. SASRA says several Saccos have members working and living in Middle Eastern countries. Job and income losses caused by conflicts could therefore affect their ability to save and service loans.
SASRA noted that this risk is particularly relevant to Saccos with substantial diaspora membership. It urged them to take the conflicts into account when providing loans to members working in the affected regions.
Furthermore, the report warns that wider geopolitical changes can affect Saccos through reduced donor funding. This may lead to loss of membership, increased loan defaults, higher demand for deposit refunds and liquidity pressures.
By Lizzy Aluga
Get more stories from our website: Sacco Review.
For comments and clarifications, write to: Saccoreview@
Kindly follow us via our social media pages on Facebook: Sacco Review Newspaper for timely updates
Stay ahead of the pack! Grab the latest Sacco Review newspaper!
