The Sacco Societies Regulatory Authority (Sasra) has directed the Savings and Credit Cooperative Societies (Saccos) to cut lending, a move that will avert a financial lockdown during the coronavirus pandemic.
The societies handling more than Sh766 billion deposits have also been directed by the regulator to file daily liquidity reports, which will measure the impact of the pandemic.
Sasra Chief Executive Manager Peter Njuguna said the move willl help the corporative movement to alleviate the adverse effects of the virus to businesses, which is hurting monthly member contributions and loan repayments.
Speaking at the World Council of Credit Unions and the African Confederation of Co-operative and Credit Association teleconference, Mr Njuguna said deposit-taking Saccos will also file monthly loan performance reports to enable Sasra monitor the operations of the movement during the pandemic.
“We are closely monitoring member activities to avert a situation where Saccos experience liquidity challenges. We have advised them to impose stringent measures and go slow on lending to avert a financial lockdown. The reports will enable us come up with practical intervention measures,” said Mr.Njuguna.
The CEO said Saccos have also been advised to close offices and shift to online and mobile services, in a bid to curb the spread of coronavirus.
“All meetings of more than 10 people have been banned but sectoral committee meetings of four people can be convened when necessary to deliberate and approve urgent business.”
This comes barely a month after the Central Bank of Kenya (CBK) issued a directive to financial institutions lower interest rates on loans, as a measure to avert borrowers from the diverse effects of COVID-19.