Stima, Unaitas top Saccos as sector grows

Sacco’s grew their assets by 14.2 per cent last year with Stima and Unaitas the star performers driven by enrolment of new members.

Latest data from Sacco Societies Regulatory Authority (SaSRA) shows assets of the co-operatives stood at Sh335 billion in December compared to Sh293 billion a year earlier.

The growth was driven by increase in membership to 3.3 million members from 2.97 million.

“This growth was mainly funded by member deposits, share capital and retained earnings,” said chief executive Carilus Ademba.

Stima Sacco nearly doubled its membership to 26,468, which saw it rise to be the third largest union — after teachers’ Sacco Mwalimu and Harambee for civil servants — with an asset base of Sh12.4 billion, an increase of Sh3 billion.

Unaitas, which has declared intention of converting into a bank, increased its membership by 32,000 to 146,964 going up three places to rank eighth with an asset base of Sh5.5 billion, from Sh3.9 billion.

Savings made through the co-operatives stood at Sh240 billion from Sh213 billion. Sacco’s loaned out Sh251 billion compared to Sh221 billion a year earlier.

The volume of non-performing loans dropped to Sh8.9 billion from Sh11.7 billion. Amount set aside as provision for bad loans, however, went up by Sh1 billion to Sh4.1 billion which the authority attributed to improved compliance.

“Full compliance with loan losses provisioning requirement should be attained by end of year and this implies strong first line of defence against credit risks and consequently protection to member deposits,” said Sasra in its report.

The co-operative societies increased their retained earnings by a quarter to Sh20.5 billion underlining a change of strategy among Saccos that used to pay out all their income in dividends.

The Saccos reverted to retaining a portion of the earnings to grow their capital levels so as to ensure compliance with new regulatory requirements.

Sacco sector in Kenya was first regulated in 2009 following the formation of Sasra which ordered them to bolster their capital levels and increase their loan provisioning.

Last year, the regulator ordered 30 savings and credit cooperatives to stop collecting deposits from the public over failure to comply with the statutory capital levels which left them with back office operations that only allow lending cash to members based on their savings.

There are 234 licensed deposit taking co-operatives in Kenya. But there are more than 6,000 registered non-deposit taking Saccos, only 1,995 of which filed their audited financial statements with the Commissioner for Cooperative Development as a legal requirement.

Kenya has the largest co-operative movement in Africa in terms of savings held. But it ranks fourth in terms of penetration which stands at 19 percent of the population.

Teachers are the largest users of the Saccos with 32 registered societies that control 34 per cent of the industry savings.

Government officials had 27 Saccos controlling 39 per cent of the savings while farmers had 44 unions holding 15 per cent of the industry deposits.

Saccos comprising teachers, parastatals and government officials are larger due to their long history. They also enjoy stable sources of business from their members who are on relatively fixed income unlike the farmers and private sector Saccos.