The Covid 19 scourge has greatly affected financial transactions in co-operative societies as monthly contributions continue to dive leading to the need for variation of loan repayments, a new study has shown.
It says reduction in monthly contributions and loan repayments is due to loss of income, jobs and reduced economic activities.
While impact of Covid-19 has been felt across all sectors in Kenya, the study shows that saccos in aviation, horticulture, and hospitality were the most affected due to cessation of air travel announced by the Kenya in April 2020.
The study on effect of measures instituted by saccos in response to Covid-19 on member engagement and was conducted by five researchers at the Cooperative University of Kenya (CUK).
According to the survey, service delivery was reduced by 65.5 percent and direct engagement with members also went down by 61.7 percent due to movement restrictions and social distancing protocols.
The research found that Covid-19 impacted performance in operations, service delivery, and engagement with members, monthly sacco contributions and loan repayment.
Loan restructuring and moratoriums or suspension of payment of loan principal for some period while impacting negatively on sacco revenues had the effect of enabling their members navigate difficult economic circumstances.
To remain afloat, saccos introduced various interventions and continue providing services.
“The measures reduced their ability to access sacco services by 26.8 per cent, made them to experience difficulties in accessing services using communication technology by 13.3 percent. About 17.9 percent of respondents also reported that the measures did not affect their access to services such as credit,” reads the study.
For members in some saccos, it took longer compared to the pre-Covid-19 period to access loans while in other members could no longer access loans as before.
On positive effects, respondents indicated that the new measures made it easier and enhanced their access to sacco services than before, facilitated and enhanced their adaptation to the new normal and improved their information communication technologies skills such as the use of online services
The study also showed the measures led to opportunities of faster, cost-effective operations, good customer experience as well as mitigating the impacts of Covid-19.