Page 30 - Issue 48_press_efile

POLICY AND REGULATIONS

NEW PLATFORM TO FACILITATE
INTER-SACCO LENDING

KUSCCO Group Managing Director Mr. George Ototo, MBS Financial experts say the establishment
of the new facility will boost competition
By Nicholas Maina in the local money market and equally
ease challenges depositors face when
Savings and Credit Co-operative Societies (SACCOs) receiving payment from their affiliated
will soon start lending to each other, following SACCOs.
an ambitious plan by the national Government to
establish a new fund facility. During the 97th (Ushirika Day)
International Co-operative Day,
Government is planning to establish Central Liquidity Fund (CLF) to enable SACCOs President Uhuru Kenyatta acknowledged
participate in the National Payments System and allow them to come up with more that Credit Unions in the country have
innovative products for Kenyans. been facing liquidity challenges and
This is expected to enhance inter-lending between the SACCOs which today only thus not able to lend to each other as
happens in the banking sector. commercial banks do.
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 “In order to address liquidity challenges
Central Bank of Kenya (CBK). faced by SACCOs and to facilitate Inter-
SACCO lending, I direct the Cabinet
Secretary, The National Treasury, the
Cabinet Secretary, Ministry of Trade
Industry and Co-operatives and
Governor, Central Bank of Kenya to
speed up the process of establishing
the Central Liquidity facility which
would enable SACCOs to participate in
the National Payment System and allow
them to come up with more innovative
products for Kenyans,” said President
Kenyatta.

However, Kenya Union of Savings and
Credit Co-operatives, the voice and
lobbyists for SACCOs in Kenya, operates
a Central Finance Fund since 1989.

The fund is founded on the same
principle as that of the Savings and
Credit Co-operative Societies.

KUSCCO top management says financial
capital for the Central Finance Fund is
sourced from the regular deposits by
SACCOs. KUSCCO pays an interest on the
deposits, which is disbursed quarterly to
member Societies.

“Trends are changing in the SACCO sub-
sector as big Credit Unions and well

28| SACCO Star Magazine