As Civid-19 continues ravaging the financial economy, Savings and Credit Co-operative Organisations (Saccos) are enduring a significant dip in borrowing and repayment of loans.
Members are now opting to restructure their loans leaving credit cooperatives’ future in disarray.
The latest casualty is Ecobiz ltd, a Savings and Credit Co-operative for SMEs in Kenya which has witnessed Sacco members stop borrowing and instead are pushing management to restructure their loans as the effects of Covid-19 bites in.
Ecobiz founder Wanjiku Wambugu says already depositors have requested for loan halt while others have stopped remitting their dues as pandemic continues destabilising the economy.
“Covid-19 effects to Saccos are miserable, there is less money flowing in affecting our incomes,” she said.
According to Wambugu, the lending facility is now in a wait and see situation with hopes of a bright future should the covid-19 curve flattens and government ease restrictions.
“We are experiencing tough times. Debt collection can push members to the wall so we have opted for engagement in a bid to restructure loans so that they can repay slowly,” noted Ms Wambugu.
Ecobiz ltd. is now adopting interest free loan to small traders especially in markets to ensure their businesses continue running so that they can service their loans.
“The focus has been on SMEs, and the creative so whatever has happened has happened to everyone and income flow had drastically reduced because the saving power has reduced. The repayment power is not coming before,” she added.
[Some of the beneficiaries from SME’s loans. Photo/Ahmed Omar].
Registered in 2013, Ecobiz was intent on empowering the low income cadre and especially the youth who form a large part of the creative sector.
“The members who are currently unable to pay their loans we have restructured their loans to ensure they navigate the Covid-19 crisis without much pain,” she added.
By creating awareness about the saving culture, the youth were empowered to qualify for financing of their small trades using their saving as collateral.