The Sacco industry in Kenya is growing at a fast rate, cementing its top position in Africa.
Last year, Saccos recorded a 10.31% growth in total assets to inch closer to a trillion mark. The industry performance has remained stable and on an upward trajectory, defying an economic slowdown to post fast growth rates in key parameters of total assets, total deposits, gross loans, and membership.
Regulated Saccos total assets portfolio increased to Ksh 890.30 billion in 2022 from Ksh 807.30 billion in 2021, according to the Sacco Societies Regulatory Authority (SASRA) Sacco Supervision Annual Report. Deposit-Taking Saccos remain the wealthiest, accounting for 85.76% (Ksh 763.50 billion) of the total assets. Non-withdrawable Deposit-Taking (NWDT) Saccos accounted for 14.37%.
“This is majorly attributed to the fact that DT-SACCOs have been under prudential regulation for over a decade, which enabled them to improve mobilization of membership driven by confidence created by regulation. Some of these DT-SACCOs have also diversified the range of their products and services thereby attracting more membership,” said SASRA.
Saccos’ mobilization of deposits and savings also posted 9.84% to reach Ksh 620.45 billion in 2022 against a depressed economy that has reduced individuals’ loose cash.
“These deposits were distributed as non-withdrawable (BOSA) amounting to Ksh 515.65 billion; the withdrawable savings (FOSA) amounting to Ksh 83.78 billion; and fixed deposits savings amounting to Ksh 21.02 billion. The BOSA deposits remain the most dominant type of deposits and accounted to 83.11% of the total deposits, with the FOSA savings accounting for only 13.50%,” said SASRA in the report.
BOSA savings, which are mandatory, increased from Ksh 427.97 billion in 2021 to Ksh 515.65 billion in 2022. On the other hand, the FOSA savings dropped from Ksh114.59 billion in 2021 to Ksh83.78 billion in 2022. FOSA savings are voluntary and easily accessible by members in case of need.
“The high inflation reported in 2022 reduced the savings’ propensity of members of DT-Saccos as it is with other segments of the population,” the report noted.
Despite the challenges, Saccos continued to offer accessible credit facilities, with the gross loans rising by 11.76% to Ksh 680.35 billion. FOSA Saccos had the highest growth rate at 12.24% to reach Kshs 586.16 billion compared to the 8.9% growth registered by BOSA Saccos.
More Kenyans joined the Sacco movement, with the total membership jumping by 7.02% to reach 6.42 million in 2022. DT Saccos had the highest growth of members at 7.34% and a cumulative membership of 5.96 million compared to the membership in the NWDT-SACCOs segment, which increased by 3.14% to 475,270 members in 2022.
The sub-sector dormant members decreased to 19.01% in 2022 compared to a proportion of 19.70% of the total membership classified as inactive in 2021, thus showing improved patronage of financial services offered by regulated Saccos.
The 49 agriculture-based Saccos controlled 42.60% of the total membership, the highest percentage, although a drop from 43.19% in 2021, while 117 government-based Saccos controlled 35.35% of the total membership, an increase from 33.49% in 2021.
“The sharp increase in the proportion of membership in Government-Based SACCOs is explainable by the expansion of their individual common bonds beyond the traditional government employees,” SASRA noted.
Despite the hard economic times experienced in the country during most of the year 2022, as evidenced by the severe droughts, high inflation, and rising interest rates, the Regulated Sacco industry continued to play its rightful role in the economy through the mobilization of savings for national development and provision of credit facilities to many household economies according to the Sacco Supervision Annual Report 2022.
SASRA forecasts a very productive year in 2023 for the regulated Saccos industry, with growth projections and momentum expected to be maintained.
