This archive report was first published on 30 June 2020.
Published on June 30, 2020, the Covid-19 pandemic has left a trail of destruction in its wake, with many Savings and Credit Co-operatives (Saccos) on the brink of collapse.
According to George Ototo, Managing Director of the Kenya Union of Savings and Credit Cooperatives (Kuscco), the pandemic has had a devastating impact on saccos from the airlines, tourism, horticulture, and transport sectors.
"Unless we rescue them, they might not come back from the look of things," Ototo warned, highlighting the urgent need for a rescue plan.
With members laid off due to the pandemic, saccos have had to deal with requests for mass withdrawals and low deposits, further exacerbating the crisis.
However, Ototo noted that some Kenyans have continued to remit even after being laid off, citing multiple sources of revenue.
"It's not very clear how long the pandemic would run, some businesses might collapse, and some loans may have to be written off," Ototo cautioned, emphasizing the need for saccos to concentrate on short-term lending.
He also urged saccos to tighten liquidity conservation, reschedule loans, and offer moratoriums where necessary, but stopped short of asking them to lower interest rates.
Meanwhile, the co-operative movement has been offering food vouchers to 5,000 households in saccos affected by the pandemic, providing a "co-op kit" containing bags of maize flour, cooking oil, soap, and face masks.
Principal Secretary for Co-operatives Ali Noor Ismail revealed that the Covid-19 response committee in the co-operative movement had raised Sh13 million so far to help mitigate the impact of the pandemic on the sector.
"We've been able to reach 5,000 co-operative households that have been affected by the pandemic, and we will continue raising funds for mitigation efforts," Ismail said.
