- Ruto said the Ministry of Cooperatives and MSME Development has been tasked with accelerating the completion of the legal instruments and regulatory framework to promote inter-sacco borrowing.
- He said the new regime will also enable saccos to access the National Central Payments System.
Image: PCS
President William Ruto has revealed that Savings and Cooperative Societies(Saccos) will soon borrow among themselves.
The President said the government is working on a legal framework that will establish the Central Liquidity Facility to facilitate the borrowing.
Ruto said the Ministry of Cooperatives and MSME Development has been tasked with accelerating the completion of the legal instruments and regulatory framework to promote inter-sacco borrowing.
“The legislative amendment to introduce a Central Liquidity Facility and create a shared services digital platform will enhance the performance of the sector by providing much-needed short-term borrowing among saccos,” Ruto said.
Speaking during the National Police Sacco's 50th anniversary in Nairobi, the President said the new regime will also enable saccos to access the National Central Payments System.
He said the government is doing all that to underscore its recognition of the role of cooperatives in wealth building, job creation and poverty eradication.
“There is no doubt, therefore, that the cooperative sector is an important player in the nation’s socioeconomic arena,” he said.
The President said that the saccos approach has provided a sustainable model for government to formulate and implement special funds that have been successful.
He said saccos have also helped improve policies and programmes aimed at deepening financial inclusion, designing more responsive credit products and mobilising savings.
To appreciate the role saccos play, Ruto said the government created a fully-fledged Ministry of Cooperatives and MSME Development intended as a dedicated enabler.
The ministry, he said, will expeditiously create an enabling institutional framework to anchor cooperatives as key drivers of sustainable development.
Saying the contribution of the cooperative sector to Kenya’s socioeconomic development is undeniable and substantial, Ruto said cooperatives account for 31 per cent of the GDP.
He said 69 per cent of Kenyans directly and indirectly participate in saccos.
He said, currently 14 million Kenyans have mobilized a total of Sh730 billion in total savings through their savings and credit cooperative societies in the country.
This deep pool of capital is usually invested in various assets, instruments, projects and other ventures to generate returns.
“Loans, amounting to over Sh700 billion are being serviced by members, who have taken advantage of the comfortable terms, especially low rates of interest, to invest in income-generating and other welfare-enhancing endeavours,” Ruto said.
On the Kenya National Police DT Sacco, Ruto termed it as unique since it draws its membership from law enforcement officers throughout the country.
He said by injecting the discipline of uniformed services and private sector ethos into its entrepreneurial vision, the society has achieved impressive success in delivering to its members.
“This is why the Kenya National Police DT Sacco can fearlessly pursue radical, but prudent strategic directions and mobilise funds for investment in a project as unique as a sports stadium,” he said.