Sacco in the verge of collapse

A farmers’ Savings and Credit Cooperative Society (SACCO) in Kirinyaga County is threatened with collapse after some of its members joined a rival organization leaving an outstanding loan of over Shs. 1 billion they had obtained earlier on.

Bingwa SACCO which serves farmers mainly from Kangaita, Kimunye, Thumaita, Mununga, Ndima and Ragati tea factories has now written to the Greenland Fedha where the loan defaulters had defected to, asking the organization not to accept then without a clearance certificate.

According to the Bingwa’s Chief Executive Officer, Ms Jane Mugo, the defaulters owe her organization Shs.1, 247, 601, 544.11 in un-serviced loans which if not paid could bring it down.

Correspondences between the two organizations and in possession of KNA indicate that the matter had created bad blood between the entities.

A letter Mugo wrote to the rival Sacco on November 3, last year warned the organization not to extend any credit facilities to the defectors until they cleared the huge unpaid loans.

But Mugo on Saturday claimed despite her warning the rival Sacco had continued to issue loans to the defectors at the expense of her Sacco.

Greenland Fedha Sacco on the other hand replied to Mugo’s concerns on November 9 last year promising to exercise prudence in its lending activities especially to the new remembers.

“The volume of business by our organization is negligible compared to what Bingwa transacts”, said the Ms Ann Gathuku, the Greenland Fedha General Manager.

The Manager however said in the one page letter that her SACCO could not be held responsible for the high loan defaults Bingwa was experiencing.

Bingwa has thus threatened to seek legal redress from the relevant cooperative movement body before it is too late.

By Irungu Mwangi