NYERI, Kenya, Jan 21 — Saccos countrywide are grappling with the dwindling borrowing power of their members due to government policies that have led to shrinking payslips.
This has forced many saccos to reschedule loan repayments and develop products to ensure a more conducive take-home for most workers.
One such sacco that has taken this initiative is NewFortis Sacco, whose majority of members are teachers from Nyeri County and beyond.
Speaking during the sacco’s annual general meeting, Sacco Chairperson John Githinji said many of their members have seen their pay shrink due to several policy deductions, effectively lowering their borrowing power.
“It’s true that as a sacco, we have seen some of our members’ payslips shrink, and their take-home pay has gone down,” he observed.
“However, we have developed tailor-made products, such as ‘Jawabu,’ where we are rescheduling loans and giving members the latitude to regain their take-home pay while still being able to invest,” said Githinji.
The sacco official also noted that this situation may not be the same for all saccos, especially those struggling with a high loan default rate.
“Some saccos may be in deep financial crisis due to these policies; however, we are coping with these dynamics,” said Githinji.
Nyeri Governor Mutahi Kahiga, speaking during the same function, urged the government to stop initiating policies that are ultimately draining payslips.
“As political leaders, we urge the government to stop this game of policies such as SHA and others. These are financial drains to workers,” he held.’
“If workers cannot invest due to lack of funds, we are courting a major crisis. What the government should do is implement a commensurate increase in salaries to match the deductions,” said Kahiga.
The comments by the two amid increased deductions following the introduction of Social Health Insurance Fund, which reviewed premius upwards based on earnings as oppossed to a flat rate across all cadres.
A section of salaried workers faulted the move saying they are unable to cope because they had committed their salaries to loans, leaving only small amounts.
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