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Supermarket employees’ SACCO targets shoppers with loans in membership drive

Shoppers at a Nakumatt supermarket outlet.
A savings and credit co-operative society (SACCO) owned by supermarket employees has opened up its membership to the public and announced it will offer one-year loans to shoppers seeking goods in major retail chains.
Naku SACCO, which has rebranded to Shoppers SACCO, says the loans will attract interest rates of one per cent per month.
The Shoppers Sacco mainly draws its members from employees of Nakumatt, Tuskys and Woolmatt, among others and has a membership of 16,476.
“This product loan will enable members to select a specific product the sacco will finance and the loan will be repaid within a year,” Shoppers Sacco chairman Wilfred Aima.
The move is similar to an arrangement between retail chain Nakumatt and Bank of Africa, which was inked in 2014 offering goods worth between Sh50,000 and Sh500,000 on credit at a monthly interest rate of 1.5 per cent.
The hire purchase credit service is a strategy aimed at boosting sales of high-value goods such as furniture and electronics for retail stores and lending for the financial institutions.
The introduction of the shopping loans and admitting the public is meant to grow its membership and loan book that stood at Sh1.5 billion last year.
The SACCO will also seek to compete with banks whose interest rates have come down with the introduction of a cap.
SACCOs have previously been lending to members at an average 12-14 per cent but the recent cap on interest rates charged by banks has seen their rates come down from an average 19 to 14 per cent posing direct competition to SACCOs.
Some of the SACCOs have also had to adjust their interest rates in accordance with the law.
Source: http://www.businessdailyafrica.com/

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