Deposit-taking saccos’ assets rise to Sh442bn

Deposit-taking Savings and Credit Co-operative Organisations (DT-saccos) defied 2017’s election turbulence to post a 12.4 per cent growth in total assets.

Sasra chief executive John Mwaka. PHOTO | SALATON NJAU | NMG 

IN SUMMARY

  • Saccos’ deposits rose to Sh305.3 billion in the year, representing a 12 per cent growth from Sh272.58 billion registered in 2016.
  • Unlike most sectors that registered depressed performance attributed to violent skirmishes that disrupted lives during the prolonged electioneering period, loans and advances dished out by the 174 DT-saccos rose to Sh331.2 billion, an 11.29 per cent growth from the previous year’s 297.6 billion.

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Deposit-taking Savings and Credit Co-operative Organisations (DT-saccos) defied 2017’s election turbulence to post a 12.4 per cent growth in total assets, which hit Sh442.3 billion from the previous Sh393.5 billion.

The just-released Sacco Societies Regulatory Authority (Sasra) report shows saccos’ deposits rose to Sh305.3 billion in the year, representing a 12 per cent growth from Sh272.58 billion registered in 2016.

Unlike most sectors that registered depressed performance attributed to violent skirmishes that disrupted lives during the prolonged electioneering period, loans and advances dished out by the 174 DT-saccos rose to Sh331.2 billion, an 11.29 per cent growth from the previous year’s 297.6 billion.

Banks, however, continued to be major beneficiaries of the saccos.

“Commercial banks were the single principal lenders to DT-saccos at 89.16 per cent where Sh19 billion was lent during the year under review,” it observes, adding that Sh2.9 billion was paid out as interest to banks. The loans and advances activity earned DT-saccos Sh52.65 billion out of the total Sh63 billion realised in 2017 while investments brought in Sh2.16 billion. Other income stood at Sh8.24 billion.

Sasra urged DT-saccos to ease reliance on loan and advances interest income saying increased competition from online and mobile-based lenders as well as commercial banks risked eroding gains.

Only 70 saccos maintained a healthy loans-to-deposits ratio with the rest borrowing largely from banks to meet the high demand for loans and advances from their members.

Sasra said this portends a grim future for saccos which must diversify their investment mix, especially via purchase of government securities, to strengthen liquidity buffers.

On modernisation of services, 114 DT-saccos adopted use of ATM services.

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