Kenya Union of Savings and Credit Co-operative Societies (KUSCCO) is demanding the release of Shs.3 billion withheld deductions from employers to enable Saccos deal with COVID-19 pandemic.
The union said due to increasing loan demands, ministries, parastatals and private institutions should release withheld employee deductions which will enable societies meet their members’ needs.
KUSCCO managing director George Ototo said, if released the funds will improve cash flow to enable in Saccos, thus averting them from diverse effects of coronavirus.
“The government must move fast to penalize offending chief executives, vice chancellors and principal secretaries among state agency heads that deducted money from workers’ salaries but failed to remit the money,” said Mr. Ototo
He warned that if the funds are not released, societies may be hit by increasing loan demands, posing threat from members if they fail to issue them.
“Now saccos are reeling from a raft of loan demands they cannot meet and this has forced many members to file quit notices so as to access their savings for meeting their daily expenses,” he said.
Business daily report that in February, Treasury secretary Ukur Yatani gave State agency and other public entities up to June 30 to clear all statutory dues and verified supplier bills, warning that a caveat on future expenditures will be placed on agencies that miss the deadline.
CS Yatani added that he will demand a payment plan from all offending entities, saying that statutory deductions should be a priority during budgeting.
KUSCCO compiled a list of all offending public entities which will see chief executives and board chairmen put on the list of shame.
Meanwhile, the World Council of Credit Unions has called on the government to designate Saccos as “essential” service providers during the Covid-19 crisis.
World Council Vice President of Advocacy Andrew Price said the exclusion of societies from essential service providers denies them the opportunity to help during this pandemic.
“Exclusion of Saccos from the definition of ‘essential’ prohibits them from providing these necessary and often life-saving services. Credit unions should not be arbitrarily left to die off because they were omitted from a definition of ‘bank’ or ‘financial Institution,” said
The VP added that empowering saccos will enable Kenya’s 14 million savers enjoy affordable loans much needed to weather the Covid-19 crisis.
Saccos play a major role in the country’s lending industry, with many Kenyans trusting their savings in the movement.