Kenyans have been advised to only borrow loans when necessary and for productive purposes.
Focus Sacco Honorary Secretary Jamal Runyenje warned that uninformed and misguided borrowing is pushing many people into financial hardship instead of improving their economic wellbeing.
He said many borrowers take loans without clear needs or plans, leading to misuse of funds and repayment struggles.
Speaking during the AGM, Runyenje urged members and the public to exercise discipline and intention when seeking credit, noting that loans should only be taken to meet genuine and beneficial needs.
Runyenje, who is also the founding chairman of the Sacco, said the institution — which started as Runyenjes Juakali Sacco before rebranding to Focus Realtors Sacco — has consistently avoided external borrowing despite members approving a Sh20 million borrowing power for the Sacco leadership.
He revealed that the Sacco has never borrowed even a cent because there has never been a compelling need to do so.
According to him, borrowing increases operational expenses since loans must be repaid with interest, a cost that would ultimately reduce members’ deposits and earnings.
NOTE: ARISE MEDIA is now on WhatsApp Channels! CLICK this link to JOIN and read the news in your favourite messenger.
He observed that overdependence on borrowed funds is one of the reasons many newly formed saccos collapse shortly after launch, especially those that try to attract members by paying dividends from borrowed money instead of actual surplus.
Runyenje also disclosed that he is in the process of writing a book on cooperative management, which he said will help strengthen governance and sustainability in cooperative societies.
He added that Focus Realtors Sacco does not send prompts encouraging members to take loans, saying such practices are predatory and push members to borrow and misuse money.
During the year under review, the Sacco paid dividends on share capital at 10 percent and interest on member deposits at 7 percent, according to a report presented by Sacco Chairman Bishop Dr. Linus Murithi Ndwiga.
However, the chairman’s report indicated that high inflation reduced members’ disposable income, with many members using their savings to clear existing loans, slowing savings growth.
He spoke during the Focus Sacco Society Ltd’s 18th Annual General Meeting held at Focus Plaza Boardroom in Runyenjes, Embu County.
What’s happening near you? Send us the story via
news@arisemediagroup.co.ke or WhatsApp 0750456085
Book Advert-use above contacts
89