The move by the countries biggest lenders to stringently impose new requirements has greatly compelled credit cooperatives to join bank borrowers who they had earlier vetoed.
President William Rutos financial inclusion agenda is seemingly taking shape, after the countries sacccos and cooperatives joined hands with the national payment system (NPS) in sustained efforts to lower the cost of credits.
Erstwhile, while saccos overly depended on banks to get funding together with other commercial services such as cheque processing and issuance the move might affect, to a big extent, the countries banks which have relied on these saccos for third party business like issuing of cheques.
Furthermore if the agenda goes on to succeed, banks will stand to loose as saccos will now have the capability and clearance to lend money to fellow saccos through the central liquidity facility (CLF) which is an equivalent of the interbank market.
The process to have these saccos sheltered under mainstream financial services has for a period of over seven years been made elusive by the sheer absence of the industries players to join hands and get to consensus on the matter.
Now, it’s a hot button issue in the country amid the soaring cost of living which has in turn increased the cost of borrowing including with saccos.
According to SASRA Sacco societies regulatory authority which has for a time now been helplessly watching the hiccups facing the sector, externally borrowed funds are in most instances expensive and often owe to changes in interest rates.
Now President Rutos administration has moved to prioritize the admission of saccos into the National Payment system as part of the governments financial inclusion agenda.
ManagersMag 