Savings and Credit Cooperative Societies (Saccos) share of non-performing loans (NPLs) has jumped from 6.15 percent recorded in 2019 to 9.12 percent by the end of June 2020.
This is the highest increase recorded in over nine years according to a recent Central Bank of Kenya report pointing to the adverse effect Covid-19 pandemic has had on financial sector.
Gross loan for deposit-taking (DT) Saccos stood at Sh426.4 billion..
The latest NPL ratio is almost twice the maximum of five percent that is prescribed by the Sacco Societies Regulatory Authority (Sasra).
“Sacco borrowers drawn from agriculture and micro small and medium-size enterprises have felt the brunt of Covid-19 economic disruption, leading to elevated loan defaults. Credit risk remains elevated with NPLs increasing from 5.2 percent in 2016 to 9.12 percent in June 2020. Agriculture and micro and small enterprises sectors have been affected most by Covid -19 pandemic, making it difficult for members to service their loans,” said CBK in the report.
