Representing 33% of the national total, Kenya’s credit unions have mobilized a record 490 billion Kenyan shillings or $5.7 billion in savings.
According to Industrialization and Enterprise Development Principal Secretary Wilson Songa, the country’s credit unions, known as savings and credit cooperatives or SACCOs, play a key role in creating vibrancy and competitiveness in the financial sector, the World Council of Credit Unions reported.
Kenyan SACCOs have the highest growth rates in Africa and rank seventh worldwide, according to the World Council.
Most of the more than 13 million Kenyan SACCO members are savers with modest incomes, the World Council said. The SACCOs help increase their stability and wealth through saving and provide low-interest capital resources that are critical to economic growth.
Kenyans who would have been denied access to loans by most banks due to lack of collateral have access to low-interest loans through SACCOs, according to the World Council.
By introducing financial services to women and other unbanked populations, who have been traditionally excluded from the formal financial sector, Songa said SACCOs give more Kenyans the ability to generate wealth and invest in their families.
When empowered to make financial decisions, research shows that women are much more likely than men to make investments that benefit their entire family, the World Council said.
At the recent Kenyan Teachers SACCO Association annual general meeting, Songa stressed that the Kenyan government is committed to continuing to support the SACCO subsector, which creates employment and provides economic empowerment to Kenyans.
He challenged SACCOs to ensure that they maintain sound corporate governance and operate within the legal framework without losing their momentum. He also suggested they improve leadership skills and consider merging some SACCOs to achieve economies of scale.