What are the problems facing savings and credit co-operative societies (Saccos)?

Highlight the problems facing savings and credit co-operative societies (Saccos).

(i) Corruption and embezzlement of funds.

(ii) Competition from well established banks.

(iii) Political interference.

(iv) Some members defaulting loan repayment.

(v) Lack of qualified personnel.

OR

Explain five challenges facing the savings and credit co-operative societies (10mks

i) Competition – There had been steady rise in the level of competition from commercial banks which have encroached into the traditional role of the savings and credit cooperatives. Many micro- finance institutions have also joined the field to provide the same services as those of SACCO.
ii) Managerial challenges – Most of the co-operative societies have experienced managerial chalenges which in some cases have nearly caused collapse of some of the societies.
iii) Delayed remittance – some employers have been delaying remitting members deductions to the society. This has affected the society’s cash flow affecting the society lending programs. Members may take for long to get the loan as a result.
iv) HIV/AIDS – The scourge has affected many members. The society spend a lot of money in assisting the families affected through, for example, offsetting or writing off loans.
v) government policy – The government through the Ministry of co-operatives has been regulating the sector. Sometimes the government may design some policies that will affect the member of society adversely e.g 1/3 rule

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maurice.mutuku answered the question on August 5, 2017 at 05:55

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