Kenya’s savings and credit co-operative (Sacco) sub-sector has recorded a growth in its asset base to reach Ksh 807.11 billion in 2021, the recently released the Sacco Society Regulatory Authority (SASRA) report has shown.
According to the country’s Sacco regulator, the sub-sector total asset base increased from Kshs 734.22 billion in 2020 which represents a growth of 9.93 per cent, with deposit taking (DT) Saccos having the highest proportion of the total assets amounting to Kshs 691.01 billion which represents 85.63 per cent of the total assets’ portfolio.
The non-withdrawable deposit taking (NWDT) Saccos on the other hand recorded an asset base of 14.37 per cent leaving the DT-Saccos to dominate the Sacco sub-sector.
Non-Deposit Taking SACCOs refer to those that take deposits from members only in the form of share capital.
These amounts are refundable to members only when they leave the SACCO. On the other hand, Deposit-Taking SACCOs, besides undertaking the traditional roles of SACCOs (mobilization of savings and advancement of loans to members), also actively mobilize and receive withdraw-able deposits.
This kind of operation is popularly known as FOSA (Front Office Service Activity) in Kenya, while the former is known as BOSA (Back Office Service Activity).
The authority started regulating the NWDT as from last year 2021 whereby they were expected to comply by applying to the Authority within six months of the Regulations 2020 having come into legal effect, that is, January 1, 2021 for authorization to operate.
The NWDT cumulatively hold members’ deposits amounting to over Ksh100 million.
According to the report released by the regulator on August 3, 2022 the authority licensed a total of 361 Saccos in 2021 which include 176 DT-Saccos and 185 non-withdrawable deposit taking (NWDT) Saccos.
The DT-Saccos had the largest proportion of the total deposits portfolio amounting to Ksh 474.25 billion representing 83.95 per cent of the industries total deposits, while the NWDT shared the remaining 16.05 per cent of the total deposits’ portfolio despite outnumbering the DT-Saccos.
“High retention of surplus led to increased industry capitalization during the year 2021 giving SACCOs the much-needed funding to invest back in the business. Total membership stood at 5.99million by end 2021 with majority (47 per cent) affiliated to 49-agriculture-based SACCOs followed closely by membership from 117-government based SACCOs at 35 per cent,” said Sasra in a statement.
The non-remittances by institutions to SACCOS which remains a challenge amount to Ksh.3.4billion which was a 32 per cent drop from the Ksh. 5billion in 2020 with Public Universities and Tertiary Colleges accounting for 38 per cent of the total non-remitted recording a drop of 56 per cent to Ksh 1.29 billion from 2.95 owed in 2020.