Lack of inadequate capital to finance startups and expansion of existing businesses are major bottlenecks hindering the growth of small and medium enterprises.
With Savings Credit and Cooperatives Societies (Saccos), however, many businesses have the opportunity to open accounts where they can save over a period of time and take affordable credit.
Saccos have emerged as key players in financing individuals and businesses and accelerating the country’s economic growth.
During the National Cooperatives CEOs workshop in Mombasa, lack of appropriate data for small and medium enterprises was cited as reason for lack of financing.
With the right data, Saccos can manage and measure risks will significantly improve the availability of borrower data points continues to grow.
A poor saving culture makes it extremely difficult for Sacco to lend to businesses.
Loan defaulting is also a factor as many would default as some of them have a don’t care attitude and average willingness to repay.
In most cases, most pretend to be Small and Medium Enterprises, but once they get the capital, they disappear into thin air.
With lack of manpower to assess the viability of their repayments before getting the loans and after receiving credit, loan recovery becomes a challenge.
