By Munene Maina
Co-operative societies countrywide braved tough economic period to post good returns to members during the financial year 2017.
Going by financial reports presented to members and delegates during Annual Meetings, most societies defied odds and pundits extrapolations of negative outcomes, to register impressive performance for the year.
Prolonged drought, long electioneering period, high loan defaulting and capping of interest rates, among other challenges greatly affected co-operative sector growth.
In some societies members were not impressed by returns they received for the year and managements were pressured to give explanations.
Eating into members earning was on the rise on non-performing loans in many Saccos across the country, forcing them to raise the amount set aside as provision for bad loans.
Defaulters owe co-operative societies an accumulated more than Sh8 billion which has not been serviced for years.
Members’ loan uptake during the financial year also plummeted affecting Saccos earning from interests on loans advanced to members, their major source of income.
The fiscal year was the toughest in the past five-year period further aggravated by a weak agricultural sector due to adverse weather conditions and uncertainty and disruptions related to election cycle.
The country’s Gross Domestic Product (GDP) nose-dived and grew at an estimated 4.8 percent, the lowest since 2012, even as the national debt increased to about 40.4 billion dollars forcing the Government to spend at least a third of its annual revenue on debt financing.
This made it hard to fund development projects.
According to the Economic Survey, 2018, the financial sector recorded a decelerated growth of 3.1 per cent in 2017 compared to a growth of 6.7 per cent in 2016.
Co-operative sector players are optimistic that the economy will bounce back in 2018.
The World Bank predicts the country’s economy is set to recover and grow by 5.5 per cent this year steadily rising to 6.1 per cent in 2020, although this will be subject to a number of factors.
Despite all the negative factors, the movement remained on upward growth trajectory and offered some of the highest returns on investments in the country.
Co-operators received earnings running into billions. In Nyeri, NewFortis Sacco announced a total payment of Sh445 million in dividends and interest on deposits. Kerugoya based Ollin Sacco paid out Sh243.8 to members while Winas Sacco, based in Embu, gave out over Sh277 million to members.
Qwetu Sacco announced a total payment of Sh65 million on dividends and interest rates on deposit.
Bingwa Sacco members were paid a total of Sh157 million while Nakuru’s Cosmopolitan Sacco paid members a total payout of Sh353 million.
The above sampling points to a sector that is strong and greatly contributing to eradication of poverty by assisting members build wealth.
Below is a glimpse on what co-operators earned for the financial year 2017 from various saving and credit societies based on financial reports seen by Sacco Review.