Agriculture based Saccos lead in loan defaults, SASRA reveals

The annual Savings and Credit Cooperative Organizations (SACCOs) supervision report 2022 released by Sacco Societies Regulatory Authority [SASRA] has revealed that 49 agriculture-based SACCOs have topped the charts in loan defaults by the ratio of 18.42 percent, more than double the industry average.

Notably, these 49 agriculture-based Saccos represent the largest membership within the sector, with a staggering 2.74 million individuals, accounting for 42.6 percent of all regulated SACCO memberships. 

Among these, crop production-focused Saccos experienced the highest non-performing loans [NPL] ratio at 19.4 percent, while those primarily involved in dairy production faced a 12.56 percent NPL ratio. 

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This marks a significant increase compared to 2021, where NPL ratios stood at 14.83 percent with 15.72 percent for crop farming and 7.32 percent for dairy farming.

In contrast, general services-based deposit-taking [ DT] Saccos had the lowest NPL ratio at 4.95 percent, followed by private sector-based Saccos at 6.36 percent.

 Other categories included universities-based DT Saccos at 7.97 percent, State corporation-based at 11.07 percent, county government-based at 8.35 percent, teacher-based at 10.68 percent, and community-based at 14.18 percent.

By Vostine Ratemo

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