The 2022 SACCO Supervision report has revealed a concerning trend of how SACCO members sought more loans than they had deposited.
According to data from the SACCO Societies Regulatory Authority (SASRA), SACCOs held deposits of Ksh620.45 billion but loaned out Ksh680.35 billion by the end of 2022.
The loan book grew by 11.8% from Ksh608.75 billion in 2021, while the deposits expanded by
9.8 per cent from Ksh564.89 billion in 2021.
This mismatch leaves SACCOs with high finance costs as they borrow from other institutions to meet loan demand.
The report stated that high inflation and interest rates, along with increased external borrowing costs, have hindered members from saving.
Withdrawable deposits dropped by 26.9% to Ksh83.78 billion even as regulated SACCOs paid an average interest of 6.92% on member deposits in 2022, a rate higher than that paid by commercial banks.
SACCOs charge 12-16% interest on loans, while commercial banks charge over 20%.
By Vostine Ratemo
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