Report: SACCOs issued over Ksh750 billion in loans to Kenyans in 2023

The Sacco Annual Supervisory Report reveals that SACCOs issued loans worth over KSh 758 billion to Kenyans in 2023.

The loan portfolio for regulated SACCOs grew by 11.50%, reaching KSh 758 billion.

However, despite this strong growth in loans, deposits only increased by 9.95%, slightly higher than the 9.84% growth recorded in 2022.

This gap in financing was mostly covered by member share capital and retained earnings.

The report shows that the Non-Withdrawable Deposit-Taking (NWDT) SACCOs segment saw a sharp rise in the growth rate for gross loans, increasing by 12.85% in 2023, compared to 8.90% in 2022.

In contrast, the Deposit-Taking (DT) SACCOs segment experienced a slower growth rate, with gross loans growing by 11.28% in 2023, down from 12.24% in 2022.

This suggests that there was a higher demand for loans in the NWDT SACCOs segment compared to the DT SACCOs segment.

Membership across the 357 regulated SACCOs increased by 6.57%, reaching 6.84 million members in 2023, up from 6.42 million in 2022.

However, the Cabinet Secretary noted that this still represents less than 30% of Kenya’s adult working population, pointing to significant potential for further growth, especially when compared to countries with over 40% SACCO penetration rates, according to the World Council of Credit Unions (WOCCU).

SASRA CEO Peter Njuguna announced that 176 DT-SACCOs were licensed to conduct deposit-taking SACCO business, but this number dropped to 174 after M/S Jacaranda SACCO Society Ltd and M/S Kenya Midlands SACCO Society Ltd failed to meet the minimum requirements, resulting in the revocation of their licenses.

“Members of the public are advised to avoid conducting deposit-taking business with these institutions to prevent losing their investments,” Njuguna warned.

The report also noted a growing trend where NWDT-SACCOs are seeking to expand their services to include deposit-taking business (FOSA).

Six NWDT-SACCOs have already applied for deposit-taking licenses, with two—M/S Njiwa SACCO Society Ltd and M/S Jogoo SACCO Society Ltd—successfully receiving licenses to begin deposit-taking operations.