Economic impact of covid-19 pandemic to Sacco’s

As the world grapples with the Covid-19 pandemic, much has been happening economically with efforts to cushion the society from the adverse effects caused by the pandemic.Kenya reported its first coronavirus case on March 13, 2020 –a move that prompted President Uhuru Kenyatta to direct on measures to help curb the spread, including the nationwide curfew that was imposed on March 25.The pandemic has caused a ripple of effects to the country’s economy, especially the financial service sector –and SACCOs have not been left behind. Societies business has been adversely affected losing especially on deposit mobilization.

The rate at which we disburse loans has gone down due to limited uptake by members and the cash crunch exhibited in the SACCOs. Organizations have laid off employee, a move that has affected business thus affecting the inflow of cash. Members have also been skeptical in taking loans due to the uncertainty in the future as a result of the COVID-19 pandemic.Going forward as societies, we have adopted various technological strategies including virtual meetings and digital channel communication, to ensure we have sustained our services to members.

The first encounter whenever there is a pandemic are the effects and the impact which follows later. Some of these effects so far noted are both social and economic.Social effects. The pandemic has posed a number of effects to the society which includes;a) People working from home.b) Virtual other than boardroom meetings.c) Imposed curfew where movement has been restricted.d) Lack of gatherings for people to share ideas.e) Loss of jobsEconomic effects

The total economic effects will be felt much later depending on how the pandemic is handled and the time taken to control it. Meanwhile, the immediate economic effects caused when the virus struck the country includes;a) Loss of business.

Low deposit mobilization. Poor loan performance The Government, in its effort to cushion citizens against the socio-economic impact caused by the pandemic, has been able to offer tax relief to both individuals and companies –based on the following tax brackets.a) Corporation tax reduced from 30% to 25%b) PAYE reduced from 30% to 25% and the tax bracket on payee having been improved from the minimum taxable amount from Kshs. 15,000 to Kshs. 24,000.c)

Value added tax (VAT) having been reduced from 16% to 14%d) The injection of the stimulus economic funds into the economy specially to settle the pending bills of services rendered to both the County and National Government. The move comes as a relief to societies, as it will go a long with strengthening our SACCOs as well as increasing both the purchasing and the borrowing power. Members of the SACCOs will greatly benefit on the corporation tax since what would have gone to KRA can circulate within the SACCOs to generate more business. Sacco’s should concoct for the hard times ahead us the ripple of effects from the pandemic appear to be endemic for the next two years. As a society, we urge the SACCO members to follow all Government directives and simple hygiene measures to help curb the novel coronavirus, which include; a) Wash your hands with soap) Sanitize your hands) Observe social distanced) Wear mask. GOD FOR US A