MADISON, Wis. (11/4/13)--Kenyan credit unions have mobilized a record $5.7 billion in savings--which represents 33% of the national savings--while providing much-needed access to financial services to unbanked populations, especially women, according to Dr. Wilson Songa, Kenya's Industrialization and Enterprise Development principal secretary.
Kenyan credit unions, known as savings and credit cooperatives (SACCOs), play "a key role in creating vibrancy and competitiveness in the financial sector," Songa said at a recent Kenyan Teachers SACCO Association annual general meeting.
Most of the 13 million Kenyan SACCO members are savers with modest incomes, according the World Council of Credit Unions. SACCOs help increase their stability and wealth through savings.
SACCOs also provide low-interest capital resources that are critical to economic growth. Kenyans, who would have been denied access to loans by most banks due to lack of collateral, have access to low-interest loans through SACCOs. As a result, SACCOs help ordinary Kenyans transform their lives, said World Council.
By introducing financial services to women and other unbanked populations, who have been traditionally excluded from the formal financial sector, SACCOs give more Kenyans the ability to generate wealth and invest in their families. When empowered to make financial decisions, research shows that women are much more likely than men to make investments that benefit their entire family.
Women with access to formal savings accounts will save more and increase business investments by 40% in four to six months, according to Goldman Sachs Global Investment Research. With greater financial autonomy, women also invest more in education, access to medical care and better-quality food for their families. These types of choices, made possible by financial access through Kenyan SACCOs, are good for economic growth and transformative for individual families.
Kenyan SACCOs have the highest growth rates in Africa and rank seventh worldwide, said World Council. Songa stressed that the Kenyan government is committed to continuing to support the SACCO subsector, which creates employment and provides economic empowerment to Kenyans.