The 2022 Sacco Supervision Annual Report revealed that the cumulative core capital of DT Saccos grew from Ksh109.29 billion in 2021 to reach Ksh124.89 billion in 2022.
The institutional capital to total assets ratio, which tests the ability of DT Saccos to build their capital from retained earnings and surpluses, increased from 9.15 percent recorded in 2021 to reach 9.58 percent in 2022, against the prescribed minimum of 8 percent.
The foregoing shows that on average, DT Saccos were able to sufficiently make retentions from their surpluses for purposes of building their capital.
On the other hand, the core capital to total assets ratio increased from 15.81 percent in 2021 to 16.36 percent in 2022 against the prescribed minimum ratio of 10 percent.
The core capital to total deposits ratio also increased from 23.05 percent in 2021 to 23.90 percent in 2022.
This indicates that the DT Saccos segment is stable hence it operates above the prescribed minimum capital adequacy requirements.
168 DT Saccos were able to maintain their core capital above the minimum of Ksh10 million, while 8 DT Saccos had their core capital below the prescribed threshold during the year ended December 2022, as it was in the year ended December 2021.
The core capital to total deposits ratio, which is prescribed at a minimum of 8 percent, was complied with by 168 DT Saccos in 2022, an improvement from 163 DT Saccos in 2021.
Only 1 DT Sacco did not maintain the prescribed minimum though it was still within the allowable threshold of over fifty percent of the prescribed minimum. 7 DT Saccos were below the allowable threshold of fifty percent of the prescribed minimum.
The core capital to total assets ratio was fully complied with by 144 DT Saccos in 2022 compared to 154 in 2021.
The drop in the number shows that these SACCOs were growing their assets at faster rates than their core capital, a situation which will require them to increase the rates at which they retain their surpluses.
These Saccos’ core capital to total assets thus fell to between 5 percent and 10 percent, resulting to an increase in the number of such Saccos to 20 in 2022 compared to 11 the previous year.
12 DT Saccos were reported to be non-compliant with the core capital ratio and are thus operating on strict conditional or restricted deposit-taking licenses.
The institutional capital to total assets was fully complied with by 144 DT Saccos in 2022, an increase from the 125 DT Saccos in 2021.
The foregoing shows that DT Saccos have been able to make adequate retention from their surpluses for purposes of building their capital which enhances stability given that such capital is less expensive than the other sources of capital.
By Thuita Jaswant
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