Bank urged to consider setting up Sacco

April 2, 2011 12:00 am

, NAIROBI, Kenya, Apr 2 – The Co-operative Bank has been urged to consider setting up a Savings and Credit Co-operative Society within the bank\’s system.

United Women\’s Savings and Credit Cooperative Society, Executive Chair, Nancy Mutugu is of the opinion that such a Sacco would cater for the large and growing number of professionals and self employed individuals who have been left out of the mainstream co-operative sector.

In an interview with Capital FM News, Mrs Mutugu said, "This group comprises doctors and lawyers in private practice, engineers and other consultants. These individuals often do not fit into the Small and Medium Enterprise (SME) scheme of lending when they are looking funding and they sometimes feel ill prepared to go through the rigorous process of getting money from a commercial bank."

Mrs Mutugu explains that some of the issues raised by this group are that SME lending amounts are too small and conditions such as those of being in a group are unfavourable. They also say that interest rates in commercial banks are too high and most of the time they do not have the collateral required to get the loans.

"United Women\’s Savings and Credit Cooperative Society (UWS) came into being more by default rather than by design," said Mutugu adding that she initially wanted to see the formation of a big co-operative within the banking system.

"While working as Credit Manager at the bank, I tried to sell my idea to my superiors without much success," said Mutugu.

"Ten years after we formed United Women\’s SACCO; I am even more convinced that a bank and especially Co-operative Bank, because it has the knowledge of co-operatives can form this mammoth co-operative so that people don\’t need the formal type of securities required by the commercial system. They can also introduce and guarantee each other as it happens in SACCOs."

Mrs Mutugu is also challenging women to use SACCOs to build financial freedom and build on their asset base. She says SACCOs can provide them with the opportunity to save, borrow and grow which would in turn enable them to access larger amounts of funding from banks to undertake bigger projects.

"I am not entirely for the idea of affirmative action because it does not create \’go-getters\’. I would much rather see women work hard to achieve what they want and that way they build firm foundations for themselves that could catapult them to phenomenal heights," she proposed.

Mrs Mutugu also believes that entrepreneurship however should not be peddled as a one size fits. "Let only those who have the drive and to a lesser extent the business acumen go into business; after all there are brilliant doctors and professors who would not make good business people," she asserted add that this does not mean they cannot invest and create wealth.

If the success stories of women who have grown through UWS could be replicated across the board said Mutugu, it could show that Sacco\’s can play a leading role in the growth of Kenya\’s economy.

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