Co-operatives raise concern over withdrawal of savings
Members of Savings and Credit Co-operative Societies (Saccos) in horticulture, hospitality and aviation industries are withdrawing savings to enable them cope with the effects of the Covid-19, Cooperative Alliance of Kenya (CAK) says.
Chief executive officer Daniel Marube said top management of Saccos in the said sub-sectors of the economy have expressed concern over a growing trend where members are applying for withdrawal of their savings as Covid-19 continues to spread.
“There is concern by the management of credit unions of the affected sub- sectors as their members are opting to withdraw savings to finance their daily basic needs mainly food.
Marube who spoke during a press briefing in Nairobi yesterday said if this trend is not curtailed is likely to affect the liquidity levels of the societies and equally discourage the saving culture in the country.
Wise on spending
“We encourage members to be wise on spending. Focus on essential needs and borrow when it’s very necessary. We have to preserve and manage our resources to rejuvenate our activities post this Covid-19,” he added.
Workers in the affected sub-sectors, Marube observed are in half salaries while others have been sent home thus complicating their purchasing power and thus have decided to remove their investments which they have saved for years in order to survive the harsh economic effects.
Most of the Sacco’s affected include those of employees working in flower farms in Naivasha, Nyandarua and in other hospitality facilities mostly in coast region and Aviation industries.
One of the affected Sacco’s is Concorde Sacco Society Ltd that draws its membership from employees of various international airlines operating in Kenya, travel agencies and other travel related organizations.
The Sacco’s chairperson Rosemary Ateka said that members are withdrawing their savings to survive the consequences of the pandemic that has so far affected more than 80,000 people in the world and over 1.2million confirmed cases.
She said members who happen to be employees of the international airlines that were stopped from operating are at home while some one on half salary.
“Every week we are registering not less than 20 applications seeking to withdraw their savings immediately.
They are even ready to forego 2.5 per cent surcharged on their savings which is mandatory for anyone in need of the proceeds immediately,” said Ateka.
Kenya Union of Savings and Credit Co-operatives (Kuscco) Managing director George Ototo said the situation looks gloomy for Sacco sub-sector as members’ main economic stays are affected.
“Our members are drawn from all the sectors of the economy. And our worry is that going forward and if the pandemic continues, Saccos will be adversely affected,” he said on phone.
Eliud Chepkwony, Jamiii Sacco CEO said the management is discouraging members from withdrawing savings but encouraging them to apply for loans of up to 80 per cent of their savings.
“The business environment is not forthcoming and our concern the situation might get bad,” he added.