The government is undertaking assessment of all registered savings and credit cooperatives to assess their viability in a move which could see smaller entities undergo mergers and acquisitions.
According to Cooperatives and Micro and Small Enterprises Development Cabinet Secretary Wycliffe Oparanya, the assessment follows moratorium placed on registration of new saccos as government moves in to secure members’ deposits.
“Those which are only registered by name but are not active will be de-registered and liquidated by the Commissioner for Cooperatives as required by law. Those which are active and viable will be required to be supervised by SASRA, otherwise they shall equally be de-registered and liquidated,” said Oparanya.
Speaking during the release of Sacco Supervision Annual Report 2024 by the Sacco Societies Regulatory Authority (SASRA), Oparanya backed mergers of small sacco to facilitate their access to expensive technology, make them resilient through stronger balance sheet and regulate them.
According to the report, as of December last year, Kenya had 355 registered saccos with a combined assets of Ksh 1.08 trillion having grown by 9.2pc from Ksh 971.96 billion.
“Indeed, it is worthwhile to note that even among the 355-Regulated SACCOs, a total of 216 of them have relatively small balance sheets of less than Ksh 1 billion in assets totalling to Ksh 79.66 billion which is only 7.4pc of the total assets. Such small balance sheets undermine their competitiveness in the credit business, which today heavily runs on very robust ICT and technological platforms, but which these SACCOs can hardly afford,” said Oparanya.
At the same time, the government is also seeking to separate matatus operating as saccos by establishing frameworks to create Transport Cooperatives.
The move will see all Public Service Vehicles operating as sacco despite not being in the business of credit and deposit taking registered under Transcoops will those undertaking sacco activities registered under SASRA.
As of December last year, the industry gross loans grew by 11.4pc to Ksh 845 billion from Ksh 758.6 billion a year earlier.
“The aggregate analysis of financial expenses of regulated saccos shows that the financial expenses increased to Ksh 5.4 billion in 2024 from Ksh 3.1 billion in 2023. Retained earnings increased by 21.7pc in 2024 to reach Ksh 52.7 billion thus showing that the regulated saccos were resilient enough to absorb the said impairments,” said Jack Ranguma, Chair SASRA.
However, SASRA has flagged non-remittance of deduction by employers which has risen from Ksh 2.6 billion in 2023 to Ksh 3.49 billion last year with public universities, county governments and county assemblies being the largest non-remitters.
“We did issue a guidance note on how best to make recoveries albeit awaiting remittance from employers and that has worked well where recoveries are instituted directly through the Front Office Service Activities (FOSA). We have suggested additional policy engagement that perhaps, and in view of outstanding remittances from government entities we could work with the hand in hand with the National Treasury to see that these recoveries are made at source,” said David Sandagi, SASRA Acting Chief Executive Officer.
During the year under review, total deposits grew by 10pc to reach Ksh 749.4 billion from Ksh 683 billion reported in 2023.
