Farmers’ Saccos have recorded a tremendous growth in membership and liquidity despite the tough economic times which has affected other saccos.
According to the Sacco Supervisory Report 2024 by the Sacco Societies Regulatory Authority (SASRA), agriculture based Regulated Saccos continued to have the highest proportion of membership at about 41% of all members representing 3 million members in 2024, which was an increase from 2.85 million members in 2023, which represented about 42% of the total membership of regulated Saccos, the report said.
Sasra Chief Executive Officer David Sandagi said in an interview that agriculture Saccos are growing in Kenya due to recent financial innovations mooted by cooperatives in the recent years.
“When you look at the cooperative movement in the agriculture sector, factors like accessible and tailored financing, collective bargaining power for members, and capacity building programs that include training are making the movement to continue attracting more members,” Sandagi said.
“The government also supports them through initiatives like the National Agricultural Value Chain Development Project, which aims to provide grants to Saccos that meet certain membership and capital thresholds, further stimulating their growth.”
Eric Muthomi, a dairy farmer in Meru County, was one of those who joined the cooperative movement in 2024, after seeing the dividends many of his fellow farmers were reaping.
“I started keeping dairy cows early in 2024 in order to supplement income from my coffee farm,” Muthomi said.
“I decided to join Yetu Sacco in Meru after realizing that I can actually get a loan that is five times my savings in order to expand my farm. It is also through joining the Sacco that I knew I could even insure my cows.”
Peter Oduor, an economist in Nairobi who takes upon financial advisory roles for Saccos in the country asserted that many farmers like Muthomi have for long leaned towards Saccos to grow their farms due to the myriads of opportunities offered. This is the reason the cooperative movement in the agriculture sector is continually seeing growth.
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“When you look at the bigger picture, Saccos provide loans to farmers who may not qualify for traditional bank loans, often using group guarantees instead of physical collateral. This is a big attractor,” he avers.
He added that traditional banks have been cited for ignoring small scale farmers in the country, associating them with huge risks, an opportunity that the cooperative movement has cashed on.
At the same time, Oduor explains that many Saccos have developed loan products with repayment schedules that align with agricultural cycles, easing the financial strain on farmers.
“Digital access is also another factor. Technology, such as USSD codes and mobile wallets, has made it easier for farmers to access loans and manage their finances. That said, by pooling resources, Sacco members can buy agricultural inputs like seeds and fertilizer at lower prices,” Oduor said.
While the report paints a picture of optimism, deep shadows continue to plague Saccos in the agriculture sector.
This is as evidenced in the report which points out that consequently, and despite the increase in their membership, the 48-Agriculture based Regulated Saccos marginally dropped in the proportion of their membership to the total membership in the industry.
The marginal decline was mainly attributed to the increase in the proportion of membership of community-based Regulated Saccos to 15% representing 1.08 million members in 2024 from 0.98 million members representing a proportion of 14% in 2023; and as well as the increase in the proportion of membership of Government – based Regulated SACCOs to 37% of the total membership representing 2.69 million members in 2024 from 2.45 million members in 2023 representing a proportion of 36% of all members.
According to Oduor agriculture saccos in Kenya are also facing challenges due to a combination of internal problems like poor management, weak technology adoption, and a lack of entrepreneurial vision, along with external factors such as, increased competition, and the strain of seasonal agricultural incomes. Members are also struggling with low savings due to inflation.
“It is imperative that some interventions are made especially on the government side to combat these challenges,” he asserts.
By Mwiti Munyua
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