Originally published: June 20, 2008
Source: Business Daily
Savings and Credit Co-operative Societies, popularly known by millions of Kenyan workers as SACCOs, will be barred from the money transfer business if a new Bill under discussion in Parliament is passed. The Bill also proposes to bar Saccos from wholesale and retail trade or investments in enterprise capital as a means of diversifying their revenue lines.
Money transfers is one of the most popular and convenient services offered by SACCOs in direct competition with commercial banks. SACCOs also compete directly with banks for deposits because SACCO members can process their salaries, emergency finance and utility bill payments through them.
The proposed law is expected to severely narrow the investment choices that the management of Saccos make and force them to concentrate more on the small self-help loans that they have proven expertise in. "Outright barring of Saccos from operating money transfer business will limit the growth of Sacco societies and give advantage to banks," said Carilus Ademba, managing director of Kenya Union of Savings and Credit Co-operatives (KUSCCO), the umbrella body of SACCOS.
Read the complete article: Bill Seeks to Block Saccos from Doing Money Transfers (Business Daily)