NAIROBI, Kenya -
“The people are very optimistic that everything can be resolved quickly,” said Erick Sile, a Cameroon national living in Nairobi, where he heads up the SACCO (the Kenyan term for CUs) Capacity Building Program. “But there is still a lot of uncertainty.”
The rioting was touched off by the presidential election, in which incumbent Mwai Kibaki was reelected, leading the opposition candidate to assert the election was rigged.
Sile, who spoke with Credit Union Journal in a call facilitated by the World Council of Credit Unions, said Kibaki’s actions since the election have been interpreted in a number of different ways. At press time, credit unionists and other Kenyans were waiting with baited breath to see what would be the outcome of a meeting between Kibaki and opposition leader Raila Odinga that was mediated by Ghana President John Kufuor.
“KUSCO (Kenya’s national SACCO trade association) is still trying to find out if there was any damage to any of the credit unions during the riots,” Sile reported. “Thus far I haven’t heard of any, but I did hear about one SACCO employee in West Kenya that had some of his papers burned.”
Sile said the situation has calmed down quite a bit and that all businesses have reopened. Most businesses, including credit unions, were closed down even before the rioting began because of a holiday and the election, which may have helped most credit unions avoid any significant damage from the rioting.
And the cooperative spirit of credit unions may also be playing an important role in keeping SACCOs safe. “I have heard of a number of commercial banks being destroyed,” Sile related, noting that banks known to have supported Kibaki likely were targeted. “But with credit unions, because they are member-owned financial institutions, I don’t think members would destroy their own credit unions.”
Even so, the financial situation resulting from the rioting could become an issue. “The minister of finance estimated that the cost of all this chaos will be 60 billion Kenya shillings, or about $1 billion U.S.,” Sile said. “The tourism industry is being hurt by this, as well as the flour industry and transportation industry.”
And a hit to transportation is also a hit to farmers, who are unable to bring their harvest to market without a stable transportation infrastructure. Since a number of credit unions specifically serve farmers, this could become an issue for SACCOs if it goes on too long.
WOCCU has two other projects in Kenya related to SACCOs in addition to the one headed up by Sile: The SACCO Growth Project, which is funded by the Gates Foundation, is directed by Jesus Chavez and Mitigating the Impact of HIV/AIDS on Economic Growth through Credit Union Modernization; Institutional Restructuring; Agricultural Business Development and Services and Education. The project is run by Sam Dunlap in the city of Kisumu, and is funded by the U.S. Department of Agriculture.
Kenya’s 2,993 CUs serve 3.26-million members and have $2.147 billion in assets.
