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News Now

CU System
Kenyan bill would block CUs from money transfers
NAIROBI, Kenya (6/23/08)--A bill under discussion in the Kenyan Parliament would bar Kenya's savings and credit cooperative societies (SACCOs or credit unions) from the money transfer business and from wholesale or retail trade or investments in enterprise capital to diversify their revenue. SACCOs rely on the retail or wholesale business to grow revenues to earn dividends for members, said All Africa (June 19). Money transfers activities is one of the most popular services SACCOs offer. Commercial banks are pushing the proposed law, which would narrow SACCOs' investment choices and force them to concentrate more on small self-help loans they are noted for, said the article. Most SACCOs run legitimate businesses but some have non-core activities--such as running restaurants, bars, office blocks and matatu fleets--that generate pyramid schemes, the article said. According to Carilus Ademba, managing director of the Kenya Union of Savings and Credit Cooperatives (KUSCCO), a trade association for credit unions in Kenya, outright barring of SACCOs from operating money transfers will limit their growth and give an advantage to banks. Last year, the World Council of Credit Unions and KUSCCO signed a partnership for a joint international fund transfer facility to enable member credit unions to start international money transfer operations through the Vigo money transfer plan. The transactions are seen as possible growth drivers, said the article. KUSCCO is lobbying to amend the bill and said Kenya's minister for cooperative development supports KUSCCO's proposed amendments.
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