By Jackson Okoth
Savings and Credit Co-operative Societies, which include deposit-taking as well as those engaged in back office operations, have mobilized savings to the tune of more than Sh 420 billion, estimated at 35 per cent of overall national savings.
This volume of savings is expected to double in the next few years arising from registration of Saccos for Kenyans in the diaspora. While Kenyans abroad have been remitting funds back home, registration of Diaspora Saccos could provide them with an avenue for remitting savings in a structured manner to facilitate effective intermediation between savings and investments, says the State Department for Co-operatives.
According to data from the State Department for Co-operatives, financial co-operatives have a combined balance sheet size of Sh 500 billion.
A status report from the State Department’s Division of Co-operative Finance and Banking indicate that Front Office Services Activity (FOSA) has emerged as a major investment activity for co-operative societies offering financial services.
This has enabled the Saccos to compete effectively with commercial banks and other financial institutions. The financial operations of FOSAs’ involve handling a huge financial portfolio from both members and non-members.
Latest figures from SASRA indicate that there are 174 licensed deposit-taking with a combined savings of Sh 342.3 billion. Kenya’s Sacco sub-sector was in the past been recognised by WOCCU as one of the fastest growing globally.
With enactment of the draft Sacco Societies (Specified Non-deposit-taking Sacco Business) Regulations, 2019, non-deposit-taking Saccos with deposits of more than Sh 100 million, are expected to come under SASRA regulations.
Saccos with deposits of Sh100 million and above, while few in number from the data available, account for about 60 per cent of all savings held by non-deposit taking Saccos.