Latest SASRA report shows fall in financial investments for regulated Saccos


Latest Sacco Societies Regulatory Authority (SASRA) reports indicate a drop in financial investments in Saccos for the period 2021/2022, against the total assets of the segment.

The total amount of financial investments of regulated Saccos decreased from Ksh50.30 billion in 2021, which represented 6.23 per cent of the total assets, to Ksh49.95 billion in 2022, representing 5.61 per cent of the total assets.

 The drop in the proportion of financial investments to total assets is singularly explainable by the significant drop in the financial investments of the DT-Sacco segment from Ksh39.61 billion in 2021 to Ksh38.89 billion in 2022.

In contrast, the financial investments for NWDT-Saccos increased marginally from Ksh10.69 billion in 2021 to Ksh11.06 billion in 2022.

The SASRA report indicates that the advantage has been borne out of a gradual increase in investments in government securities for this segment, which rose from a low of 4.28 per cent of the total financial investments in 2020 to a high of 23.43 per cent in 2022.

Financial investments are made up of investments in government securities, placements made with National Cooperatives (NACOs), shares invested in NACOs, investment shares made in publicly listed companies, and investments in other securities such as money markets and unit trusts.

The analysis also shows that regulated Saccos have been progressively reducing their placements with NACOs as a proportion of their financial investments, which have fallen from a high of 50.54 per cent in 2020 to a low of 30.00 per cent in 2022.

This may partly explain the discrepancy that has led to the drop for DT-Saccos.

Regulated Saccos have, however, continued to patronize the membership of NACOs as evidenced by the increase in the shares in the NACOs, which shot to 38.28 per cent of the total financial investments.

Investments by regulated Saccos in shares of listed companies, as well as in other regulated securities (unit trusts), remained marginal at 5.04 per cent and 4.26 per cent respectively in 2022.

The loan portfolio of regulated Saccos during the year ended December 2022 shows that the gross loans stood at Ksh680.35 billion, which is an increase from the sum of Ksh608.75 billion in 2021.

 This represents a 12.24 per cent increase in gross loans compared to 10.00 per cent in 2021.

 The gross loans were made up of Ksh586.16 billion issued by the DT-Sacco segment and Ksh94.19 billion issued by the NWDT-Saccos.

The net loans and advances for the period ended December 2022 on the other hand stood at Ksh640.72 billion compared to Ksh572.68 billion reported in 2021, the DT-Saccos taking a huge chunk of Ksh549.20 billion against Ksh91.51 billion issued by the NWDT-Saccos.

The allowance for loan losses, representing the total provisioning required under the law from the loans, increased from Ksh36.25 billion in 2021 to Ksh39.64 billion in 2022, or 9.34 per cent, compared to 44.71 per cent reported in 2021.

Although there was a cumulative growth rate in the gross loans between 2021 and 2022 for the regulated Saccos, which was reported at 11.76 per cent, the growth rate was not evenly distributed among the regulated Saccos as some of them registered negative growth rates.

A total of 265 regulated Saccos (154 DT and 111 NWDT segments), registered positive growth rates in their gross loan portfolios.

The remaining 72 entities made up of 22 DT and 72 NWDT Saccos registered negative growth rates in their respective gross loan portfolios.

By Thuita Jaswant

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