NAIROBI, Kenya–This country’s largest cooperative bank has agreed to bail out one of the country’s largest credit unions, which has been having liquidity issues in recent months.
The savings and credit co-operative Metropolitan Sacco was facing difficulties due to non-performing loans amounting to £9.3 million, according to CO-OP News.
The eight-branch Metropolitan Sacco has 100,000 and assets of £105 million. Following support from the Cooperative Bank of Kenya, the credit union has been able to re-launch its debit card, personal checks and other partnerships, the publication said.
Credit unions in Kenya are known as saccos, for savings and credit co-op.
According to Co-op News, Metropolitan Sacco is now focusing on improving its collections on outstanding loans and improving lending in general.
Deal Includes Restructuring
As part of the deal, Co-op News reported the sacco agreed a corporate restructuring program to better manage its members’ monthly loan demands and the overall liquidity flows. The Cooperative Bank of Kenya will also be providing advisory services to the credit union through its subsidiary Co-op Consultancy, with the aim of building capacity for long-term sustainability, Co-op News reported.
“The recommendations and measures that have so far been put in place will certainly get the sacco to new heights,” said the sacco[s chair, Christopher Karanja. “
The corporate restructure by the bank is the best thing that has happened to the sacco in a long time. We will now boldly and seamlessly offer services to our members.”