The Cooperative Alliance of Kenya (CAK) has appealed to societies to reconsider suspending interest rates on existing loans to cushion members against the economic down turn occasioned the Covid 19 pandemic..
CAK Chief Executive Officer (CEO) Daniel Marube told a press conference after evaluating the economic implication of Novel Coronavirus in Kenya that members of the co-operative societies were worse off financially as majority were sent on unpaid leave due to the threat of the pandemic.
He urged the societies to work out ways of waiving the interest charged on existing loans as part of their contribution in solidarity with the collective and wider fight to contain the highly contagious disease.
Marube cited workers in the industrial, horticultural, aviation and hospitality sectors where their Sacco’s were adversely affected by the Covid 19 pandemic.
“Affiliated members of Savings and Credit Cooperative Societies (SACCO) in horticulture, hospitality and Aviation industries are withdrawing their savings to cater for their basic needs”, he said
He noted that the top management of the Sacco’s in the said subsectors have expressed concern over the worrying trend after members are applied for withdrawal of their savings as the effects of the Covid-19 continue to ravage.
This trend, Marube said if not curtailed was likely to affect the liquidity levels of the societies and equally discourage the saving culture in the country.
“We want to make a clarion call to the co-operative movement to rise to the occasion and remain faithful to the social responsibility and care for others at this time”, he said
Marube reiterated that as a cooperative movement, and in collaboration with the State Department for Co-operatives they had constituted the Co-operative Coronavirus Response Committee (CCRC) to coordinate mobilization of resources and dissemination of support to critically affected co-operative societies.
“We call upon all of us to pull resources and support those vulnerable and were adversely affected by this pandemic as part of our humanitarian calling”, he said.
He appealed to the leaders of SACCOs through their CSR, partners and friends of the Cooperative movement to assist in donating through the Co-operative Covid-19 Response Fund, Co-operative Bank of Kenya Upper Hill Branch, A/C No. 01143164029200 Or Paybill No. 400222 Account No. 557473#Individual’s Name or Name of Society.
“We are focusing to raise atleast Ksh 1 billion this week to buy basic food items to members who have been affected such as loss of jobs and am sure with individual members who are over 14 million, we can be able to do so”, he said
The CEO called upon employers who were yet to remit members contributions to clear pending arrears to do so and pay up members’ dividends promptly even if they had not held to their Annual General Meeting.
“We encourage co-operatives that are yet to hold their AGMs and have surplus to speedily credit their members’ account as per the Commissioner for Co-operative Development’s directive on payment of dividends and interest on deposits by members issued on the 26th of March 2020”,
Marube has however asked members of societies not to panic saying that the Sacco model has been known to be very resilient in times of crisis but cautioned them to prioritize their expenditures.
He also urged lenders to offer loan packages that were responsive to the harsh economic times and factored the security and repayment components.
Meanwhile , the Concorde Sacco Society Ltd that draws its membership from employees of various international airlines operating in Kenya, travel agencies and other travel related organizations in one of the most affected by the covid 19.
According to the Sacco Board of directors’ chairperson Rosemary Ateka, she confirmed that members were withdrawing their savings to survive the consequences of the pandemic.
She expressed fears that most of their members were either sent home or were on half salaries prompting members to withdraw their savings.
“Our members who happen to be employees of the international airlines that were stopped from operating are at home while some are on half salary. Every week we are registering not less than 20 applications seeking their savings immediately. They are even ready to forego 2.5 percent of the savings which is mandatory for anyone in need of the proceeds immediately,” said Ateka.
She noted that apart from affecting the liquidity levels and membership as well, withdrawals will see members not able to build up on their savings again once the pandemic is addressed. “We have been engaging members on financial talk but still the trend seems to increase daily “.
The Covid-19 virus has wrecked the whole world much less occasioning big loss to human life and associated public challenges that have been witnessed in recently history.
By Wangari Ndirangu