Saccos close in on long-awaited inter-lending facility
Savings and Credit Cooperative Societies (Saccos) will soon start lending to each other, thanks to an ambitious plan by the national government to establish a new fund facility.
The government will before the end of this year set up the Central Liquidity Fund (CLF) to enable Saccos access the National Payment System and come up with more innovative products for their customers.
Agriculture and Co-operatives Cabinet secretary Peter Munya said the ministry has drafted a memo to be presented to Cabinet next week for approval.
“The Ministry is at an advanced stage of establishing a Central Liquidity Facility to facilitate inter-Sacco borrowing and enable co-operatives to participate in the National Payment Systems,” he said.
Speaking during the co-operatives four-day leaders’ meeting at Oltukai Lodge, Amboseli National Park, Commissioner for Co-operatives Geoffrey Njang’ombe said the new initiative is expected to enhance inter-lending between the Saccos and thus depart from relying on commercial banks.
“Saccos will be able to issue their customers branded cheques and the same will be cleared under a similar arrangement like the current one administered by the Central Bank of Kenya,” he said.
Co-operatives have mobilised members’ savings and deposits of over Sh800 billion, with an asset base exceeding Sh1 trillion and loan portfolio of over Sh700 billion as of December 31, 2019.