Malawi Union of Savings and Credit Cooperatives (Muscco) says savings and credit cooperatives (Saccos) have lost a substantial membership due to the Covid-19 pandemic, which has seen people losing their jobs.
Muscco Southern Region coordinator Antony Makuluni said this is Mulanje on Saturday on the sidelines of the International Credit Union Day. commemorations.
He could not provide the exact figures in terms of lost membership, but stressed that many Saccos have seen a decline in their membership owing to the harsh economic environment the country is going through.
“Many Saccos are payroll-based and as many companies have laid off their employees, it has become difficult for the people to maintain their Sacco membership,” said Makuluni.
He said Muscco, the umbrella body of Saccos, has been working with Saccos to come up with strategies that can move them forward to avoid losing more members.
The Malawi job market has been hit hard by the impact of the Covid-19 pandemic, with 273 712 people losing their jobs in the first half of 2020, according to a survey conducted by the Employers Consultative Association of Malawi (Ecam).
Ecam estimated that by March this year, 680 496 jobs would be lost in view of the pandemic.
Ecam executive director George Khaki said in an interview that many companies are operating below capacity and are resorting to minimising production costs, resulting in job losses.
Meanwhile, the Reserve Bank of Malawi in its June Financial Stability Report, covering the period between January and June, also indicated that Covid-19 had an impact on Saccos performance.
The report, a biannual assessment of the financial sector, shows that the asset quality as measured by non-performing loans (NPLs) ratio was subdued during the period under review as gross loans increased to K33.7 billion from K20.2 billion in December 2020.
The report shows that NPLs ratio increased to six percent from 5.9 percent in December 2020 against the regulatory industry ceiling of five percent due to the negative impacts of Covid-19 as some members were laid off while others had their pay reduced by different margins.