Sacco Societies Regulatory Authority CEO John Mwaka. [Photo: businessdailyafrica.com]
The Sacco Societies Regulatory Authority plans to introduce a SACCOs information sharing mechanism that will help nab perennial loan defaulters who move from one Sacco to another leaving debt in their wake.
SASRA CEO John Mwaka noted that they are currently building the institutional capital capacity of SACCOs after more than 100 deposit-taking savings and credit co-operatives failed to meet the mandatory capital ratio requirement last year.
Efficiency in Kenya’s cooperative movement has been threatened by an increase in loan defaulters which saw the industry record a high loan portfolio risk of 5.23 percent last year above the country’s recommended maximum of three percent.
Through the information sharing mechanism, SACCOs will be able to limit their loan portfolio risk and ease the burden on loan guarantors.
To enable SACCOs to meet the mandatory capital requirement ratios, Mwaka notes that they are currently building on their somewhat weak institutional capital capacity.
At the same time Commissioner for cooperatives, Mary Mungai notes that disciplining and even deregistering of SACCOs that haven’t declared annual returns for the last three years is ongoing.
They were speaking during celebrations of the distinguished service award feted to Kenya Police Sacco Chairman David Mategwa, the third person to achieve the award in Kenya, awarded by the African Confederation of Cooperatives and Savings Association.