SASRA CEO Peter Njuguna [Photo: Business Times Kenya]
The Sacco Societies Regulatory Authority (SASRA) says Deposit-taking Savings and Credit Cooperative Societies (Saccos) are planning to create a central liquidity facility to enable them to lend each other.
The move will allow them to meet unexpected or unusual short-term cash flow shortfalls.
Authority Chief Executive Peter Njuguna says they are drafting amendments to existing laws, to pave the way for approval by the National Assembly to set up the inter-Sacco lending window.
“The initiative will strengthen the capability of Saccos to handle payment services for the members. It has an element called shared digital platforms,” said Njuguna.
The proposal is expected to reduce the Saccos’ reliance on costly bank loans to maintain monthly statutory cash-flow ratios.
A majority of Saccos rely on bank loans to maintain the regulatory 15 percent liquidity ratio of savings deposits and short-term liabilities as per the Sacco Societies Act and the Sacco Societies Regulations 2010.
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