Kenyan Credit Union Savings Reach a Record US$5.7 Billion, 33% of National Savings
Savings used for increased food production, small start-ups and investments in education and health
Kenyan credit unions, known as savings and credit cooperatives (SACCOs), have mobilized a record 490 billion Kenyan shillings (US$5.7 billion) in savings, which represents 33% of national savings, according to Kenya's Industrialization and Enterprise Development Principal Secretary Dr. Wilson Songa.
At the recent Kenyan Teachers SACCO Association annual general meeting, Dr. Songa explained that Kenyan SACCOs play "a key role in creating vibrancy and competitiveness in the financial sector."
Of over 13 million Kenyan SACCO members, most of them are savers with modest incomes. SACCOs help increase their stability and wealth through savings. SACCOs also 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. As a result, SACCOs help ordinary Kenyans transform their lives.
By introducing financial services to women and other unbanked populations, who have been traditionally excluded from the formal financial sector, 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.
According to Goldman Sachs Global Investment Research, women with access to formal savings accounts will save more and increase business investments by 40% in four to six months. With greater financial autonomy, women also invest more in education, access to medical care and better-quality food for their families. These types of choices, made possible by financial access through Kenyan SACCOs, are good for economic growth and transformative for individual families.
Kenyan SACCOs have the highest growth rates in Africa and rank seventh worldwide. Dr. Songa stressed that the Kenyan government is committed to continuing to support the SACCO subsector, which creates employment and provides economic empowerment to Kenyans. Dr. Songa challenged SACCOs to ensure that they maintain sound corporate governance and operate within the legal framework without losing their momentum. He suggested they improve leadership skills and consider merging some SACCOs to achieve economies of scale.
Simon Mukunu, Kenya Teachers SACCO Association chairman, emphasized that the SACCO subsector occupies a strategic position in the social economic development of Kenya and is a major player in the realization of the Vision 2030 blueprint, which lays out Kenya's long-term plan for development. SACCOs are ready to fulfill their mandate as a vehicle for development and the eradication of poverty, according to Mukunu.
For more news on Kenyan SACCOs, visit www.nation.co.ke.
World Council and Kenyan SACCOs
World Council of Credit Unions has worked with SACCOs in Kenya since 1997 to strengthen the sector and expand financial inclusion throughout the country. World Council has implemented technical assistance programs funded by Financial Sector Deepening Trust, Kenya (FSD Kenya), U.S. Agency for International Development, Bill and Melinda Gates Foundation and U.S. Department of Agriculture, offering technology solutions to SACCOs that improve their business operations.
Former ambassador of the Republic of Kenya to the United
States, Elkanah Odembo, was recently named vice president of the African region for World
Council to oversee strategic
initiatives for its organizational members and the donor community in
IRnet® Coop Kenya Ltd. (ICK), a wholly owned subsidiary of World Council based in Nairobi, provides technical, operational and regulatory assistance to Kenyan SACCOs. ICK helps SACCOs develop and implement new technologies, including mobile solutions, to more efficiently and effectively reach underserved populations.
The Kenya Union of Savings & Credit Co-operatives is a member of World Council.
World Council of Credit Unions is the global trade association and development agency for credit unions. World Council promotes the sustainable development of credit unions and other financial cooperatives around the world to empower people through access to high quality and affordable financial services. World Council advocates on behalf of the global credit union system before international organizations and works with national governments to improve legislation and regulation. Its technical assistance programs introduce new tools and technologies to strengthen credit unions' financial performance and increase their outreach.
World Council has implemented more than 290 technical assistance programs in 71 countries. Worldwide, 57,000 credit unions in 105 countries serve 217 million people. Learn more about World Council's impact around the world at www.woccu.org.
Contact: Rebecca Carpenter
Organization: World Council of Credit Unions