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From Credit Unions, For Credit Unions

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Kenya SACCO (Credit Union) Sector Response to COVID-19

World Council’s Technology and Innovation for Financial Inclusion (TIFI) Project team provided the following report on how the credit union sector in Kenya, where CUs are called Savings and Credit Cooperative Societies (SACCOs), is conducting business during the COVID-19 pandemic.

With the confirmation of the first infection cases of COVID-19 in Kenya, safety measures have been recommended to prevent new infections and curb the spread of the virus. Stakeholders in the financial services sector took various steps during the week starting March 16, 2020 in accordance with presidential directives and a Ministry of Health advisory to limit the spread of the disease. SACCOs are keen to mitigate negative effects of the pandemic on their staff, membership and financial performance in a sub-sector where the 175 deposit taking SACCOs held KES 495 billion (USD 4.66 billion) in assets, KES 359 billion (USD 3.38 billion) in loans and had a membership of 4.97 million, as of December 2018. In this regard, the SACCO Societies Regulatory Authority (SASRA) and Kenya Union of Savings and Credit Cooperatives Ltd. (KUSCCO) have each provided a set of guidelines for their member SACCOs in mid-March.


  • Approval of audited financial statements: SACCOs are directed to submit their financial statements to SASRA for review, approval, signing and stamping through email. This measure will minimize travel for SACCO staff for the review of their financial statements. Additionally, communication with the authority should be through emails and not physical letters or in person.
  • Annual General Meetings (AGMs): AGMs have been suspended for 30 days through a circular issued by the Commissioner for Cooperatives.
  • Business meetings: SACCOs are encouraged to minimize (physical) board meetings to strictly critical ones.
  • Payment of interest rebate: SACCOs should make payments of interest on member deposits only after audited financial statements have been approved.
  • Congestion in offices and banking halls: SACCOs are encouraged to allow staff to work from home where possible, and to encourage members to use mobile money instead of cash.
  • Risk management and plans: SACCOs are advised to take precautionary measures against situations that would constrain liquidity or lead to poor loan performance.
  • Critical outsourced services: SACCOs are advised to engage providers of critical business services such as mobile money, agency services and MIS to understand how they would ensure continuity of services should the situation worsen.
  • Communication to members: SACCOs are encouraged to make necessary communications to members about any changes in business operations that may affect service delivery.


In addition to some of above measures, KUSCCO circulated communication to member-SACCOs to implement safety measures such as:

  • Promoting and practicing hygiene by providing hand washing facilities in the banking halls, regularly cleaning objects that are touched frequently, providing enough boxes of tissue paper, removing magazines and papers from the waiting areas and common rooms, and limiting all forms of employee gatherings.
  • Limiting physical meetings or business travel, including promoting home stay policies for employees.
  • Promoting safe food handling and limiting food sharing.
  • Promoting open and timely communication with employees and members

Internally, KUSCCO has also allowed most of its staff to work from home, except for a very few handling critical roles, such as managers.

TIFI pilot SACCOs in Kenya have adhered to most of the provided guidelines. Some have implemented their own specific measures as well.

Siraji SACCO

This SACCO, which is estimated to draw 60% of its membership from flower growing and exporting farms, is bracing for tough times as flower exports (and flights) to Europespecifically to the flower auction market in Netherlands—have been halted. Farms have sent staff home on unpaid leave with others getting pay cuts to reduce expenditures even as the CEO of the Agricultural Employers Association declared that fresh produce exports from Kenya had dropped to 46% over the last two weeks. Other farms selling flowers directly to markets such as the United Kingdom, or that have diversified to vegetable production, are faring much better. Both the SACCO and the companies are however monitoring the situation for any decisions that may affect business. Flower farms, through the Flower Council of Kenya, are requesting the government provide tax breaks and refunds to help keep the businesses afloat.

The SACCO is not processing any new loans except for salary advances (short-term) and self-guaranteed loans where there are enough non-withdrawable deposits to cover the requested loan amount. They are in constant communication with employers to know the status of employees and the flower export business before awarding loans.

The SACCO has circulated a memo informing members about the following:

  • Temporary closure of Nanyuki and Isinya offices, and limited staff at the Timau and Naivasha branches for the next 30 days.
  • To use mobile banking services and only come to the TImau and Naivasha branches if necessary.
  • Feedback on loan applications will be made through phone calls.

This information is also sent to members through text message.

Universal Traders SACCO

This SACCO is planning to send text messages to members encouraging them to make transactions through their mobile phones instead of coming to the SACCO branches.

UTS is also closely monitoring the business environment within its area of operation and plans to introduce loan restrictions should the situation worsen. The SACCO will restructure existing loans where potential payment problems arise, as per the SACCO lending policy.

The SACCO is however keeping all their staff at work in the office and branches in the meantime.

Fortune SACCO

Fortune SACCO has also sent out communication to members through text messages and notices regarding personal hygiene measures, and is encouraging the use of mobile phones for banking services. The SACCO also plans to send staff handling non-core services out on leave.

The SACCO has also stopped the issuing of new loans, except for a few cases where businesses have a good repayment history with the SACCO, such as agriculture loans. Business loans will be awarded on a strict assessment basis, including exceptional repayment history and current sector environment.

Separately, and in relation to this, the Central Bank of Kenya (CBK) and the Kenya Bankers Association have resolved to restructure loans for corporate borrowers and medium-sized enterprises, based on their respective circumstances arising from the pandemic. The decision, communicated through a Central Bank of Kenya press release, is effective starting March 18, 2020, for a period of up to one year. This applies to borrowers whose payments were otherwise up to date as at March 2, 2020, and may be useful for SACCOs with outstanding bank loans facing liquidity challenges.

Through a separate CBK press release dated March 16, 2020, payment service providers and commercial banks have also eliminated charges for transfers between mobile money wallets and bank accounts. SACCOs have yet to completely pass this benefit on to their members, as there are portions of the transfer charges that are shared between the SACCO and the MIS provider, which are still being charged. They are however in discussions to eliminate these charges.