By Staff Writer
The saving and Credit Co-operative Societies (Saccos) lending model remains resilient in the wake of external shocks caused by the Covid-19 pandemic, new data shows. Analysis of Deposit-Taking Saccos shows they disbursed a total of Ksh 474.77 billion as loans to members, cushioning members from a rough economy and enabling them to achieve their development goals.
Sacco Societies Regulatory Authority (SASRA) Annual Supervision Report 2020 indicates the overall performance of DT-Saccos registered impressive growths recorded in all the financial performance parameters.
DT-Saccos continued to lend to their members the same way they did in the previous years, with the subsector’s gross loans growing by 13.16% in 2020 compared to 12.09% in 2019.
The subsector’s net loans and advances increased to reach Ksh 450.58 billion as DT-Saccos made a substantial amount of provisions to mitigate any potential defaults, particularly in the wake of uncertainties associated with the impact of the Covid-19 pandemic, according to SASRA chairman John Munuve.
SASRA noted that 98 percent of loans were performing as most DT-Saccos had the ratio of their non-performing loans below 5 percent.
Mr Munuve noted that DT-Saccos have consistently registered a lower non-performing loans rate compared to commercial or microfinance banking institutions.
SASRA reported that DT-Saccos were able to continue mobilizing deposits from their members without many hurdles. Government interventions to have employer- institutions remit Sacco money helped shore up savings and deposits held by Saccos.
“The reduction in the minimum income tax threshold had the consequential result of increasing the income at the disposal of members of DT-Saccos, which in turn increased the members’ savings and deposit portfolio,” SASRA says in the supervision report.
However, the Authority raised concerns over “ever-growing amounts of non-remitted deductions which some employers continue to owe to DT-Saccos.”
