Land and housing-related borrowing from credit advanced by Saccos jumped to 33.2 percent in 2022 according to a report released by the Sacco Societies Regulatory Authority (SASRA).
The massive increase is 26.9 per cent up from what was recorded in 2021 showing the aggression by Saccos in empowering its members to acquire land and houses.
The SASRA report noted that the surge in lending towards land and housing is attributed to the incremental mortgage lending model by the institutions that help them manage liquidity as they mitigate risk.
The incremental lending model is different from conventional mortgage used by commercial banks as it is premised on short-term credit facilities of between three to five years
The report also acknowledged that the partnership between Kenya Mortgage Refinance Company (KMRC) and select institutions as another driver of increased lending towards housing.
At the same time, SASRA revealed that lending for education purposes accounted for 22 per cent of new credit last year up from 20.8 per cent recorded in 2021.
However, agriculture, Kenya’s largest sector by output accounting for a fifth of Kenya’s economy recorded a drop in its proportion of Sacco credit.
Proportion lent to agriculture dropped by 3.7 per cent to 13.76 per cent.
SASRA faulted the drop to the erratic weather patterns dominated by one of the worst droughts experienced in the country’s food basket.
The report also indicated an 11.8 per cent growth in lending to Ksh680.4 billion beating the previous year’s growth of 9.67 per cent.
Customer deposits from the institutions grew by 9.8 per cent to Ksh620.4 billion buoyed by the economic recovery from the pandemic.
The number of active members in deposit-taking Saccos posted an 8.5 per cent growth to 4.8 million while total Sacco membership grew to 6.4 million.
By Vostine Ratemo
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