Saccos cash in on rate cap fallout

[Photo: Courtesy]
Saccos are struggling to meet the demand for loan requests in the wake of the interest rate cap on bank loans. 

Metropolitan National Sacco Chief Executive Francis Ng’ang’a said many banks had opted to lend to the Government through Treasury bonds and bills which are deemed secure, making many borrowers to turn to Saccos.

“Since the capping of interest rates, the demand for loans has increased tremendously which has caused a stretch on our finances,” said Mr Ng’ang’a on Saturday during the Sacco’s annual general meeting at Kiambu Primary School.

Lenders have since the regulations came into force slowed down on lending, arguing that the risk of advancing credit to Kenyans is higher and should have commensurate returns.

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Mr Ng’ang’a said last year, the Sacco gave out loans to members amounting to Sh5.2 billion.

Saccosloanscentral bank of kenyarate capMetropolitan National SaccoMetropolitan National Sacco Chief Executive Francis Ng’ang’a