The Kenya Union of Savings and Credit Cooperatives (Kuscco) Managing Director George Ototo has urged Saccos to develop loan products targeting micro, small and medium enterprises. “Saccos empower members through affordable loans and should consider developing products that suit their financial needs,” he said.
At the same time, Mr Ototo cautioned Saccos against declaring high dividends to appease members at the expense of their growth.
He noted that it is unsustainable for financial institutions to pay out huge returns to members while struggling to meet their overhead costs. “In the long run, several Saccos are being forced to resort to borrowing to stay afloat.” He spoke at IG Sacco’s annual delegates meeting in Kisumu.
“Saccos should self-regulate themselves and avoid plunging into a debt crisis which could lead to them collapsing,” he added.
Mr Ototo raised concerns that the push for higher dividends is risking the survival and growth of Saccos.
