THE Bungoma Teachers’ Savings and Credit Co-operative Society has finally been awarded a license to operate as a bank, sparking cut-throat competition for customers with existing commercial banks.The teachers’ organization that had over the years operated as a Sacco has been issued with the Sacco Society Regulatory Authority (Sasra) license, making it the only third Sacco in the country to venture into full-fledged banking business.

 The move by the new bank to offer the lowest and affordable interest rates for its customers has sparked an influx with teachers and civil servants enlisting to benefit from the new rates.

 The Manager Mr Chrispinus Barasa said that the move is aimed at making the Sacco self-reliant in terms of internal financing, a move that has pushed its membership to over 5000 members.

 “We have also introduced new services for our members that include provision of ATM services and mobile banking in our three satellite offices that we have established all-over the county,” announced Barasa.

He said that the new satellite offices have been set up at Naitiri, Sirisia and Kimilili to handle the large number of customers as the Sacco establishes a network to compete with commercial banks.

The manager added that apart from teachers, the Sacco has opened up its membership to other civil servants, businessmen and farmers in order to help many people in the county to access loans.

 However, Barasa warned teachers against joining other Saccos after getting loans saying that the illegal move has worked against the capital growth of the society.

“We want to warn members who are engaging in such activity that it’s illegal to take a loan with us only to join another commercial entity. They have to clear their liabilities with us first,” pointed out Barasa.

He added that the Sacco is preparing itself to be the bank of choice for the local community as residents await the advent of county leadership.

Teachers have hailed the Ministry of Co-operatives for awarding the Sacco the Sasra license saying that the move will save them from the high interest rates offered at commercial banks, which is 11 per cent higher than that offered to them by the Sacco.  Loan rates at the new Bungoma Teachers Sacco Bank range from between 17.4 to 19 per cent.

Barasa announced that the latest developments have necessitated the need to open up more space at the Sacco’s premises in order to accommodate the influx of new customers, expected to hit the 10,000 mark by the end of the year.

 Other commercial banks operating in Bungoma County include National, Co-operative, Barclays, Equity and Family. Others are Diamond Trust, Bank of Africa, Faulu, Kenya Commercial Bank (KCB) and K-Rep.

The commercial banks offer the highest interest rates ranging from between 27 to 30 per cent, sparking an outcry from customers