Busia Department of Trade and Cooperatives has partnered with Metropol and Trans Union Credit Reference Bureaus (CRBs).
The department is sharing data of beneficiaries of the Cooperative Enterprise Development Fund (CEDF).
Chief Officer in the Department Nelson Kwamini said the move to share the data is meant to prevent defaulters against accessing any funds from banks or other financial institutions.
“CEDF is a revolving fund which borrowers need to repay. The need to partner with CRB will make it difficult for defaulters from borrowing more funds until they clear their current loans,” he said.
The law now allows Saccos to access records of bad borrowers which had only been limited to banks to view classified information.
The Chief Officer said making regular repayments will enable many borrowers to access the revolving fund, thus boosting their businesses.
The Department has to date disbursed over Sh80million to various cooperative societies in the country, the latest being Sh18m that was disbursed last week in the ceremony presided over by Busia Governor Sospeter Ojaamong.
Kwamini said many Saccos are unable to access loans for failing to audit their books of accounts, adding that no funds will be given to groups that engage in wrangles.
There are 184 licensed SACCOs in the country with deposits worth Sh205 billion and a total loan book of Sh228 billion.
Non¬-performing loans held by the SACCOs add up to an estimated Sh15 billion, indicating the bulk of borrowers have good records.
Bad loans in the banking sector are, however, at a decade¬ high Sh170 billion, indicating that the defaulters could be shifting to the SACCO sector.