SASRA: High loans demand decreased SACCOs’ financial investments 


The SASRA Sacco Supervision Report has revealed that the total amount of financial investments of regulated Saccos decreased from Ksh50.30 billion in 2021 to Ksh49.95 billion in 2022.

The drop in the proportion of financial investments to total assets was as a result of a significant drop in the financial investments of the deposit taking (DT) Saccos segment from Ksh39.61 billion in 2021 to Ksh38.89 billion in 2022.

Financial investments for non withdrawable deposit taking (NWDT) Saccos increased marginally from Ksh10.69 billion in 2021 to Ksh11.06 billion in 2022.

This is a clear indication that DT Saccos, unlike their NWDT Saccos counterparts, were faced with high demands for loans in 2022 and thus opted to liquidate some of their financial investments to fund the loan demands from members.

“There has been a gradual increase in the investments in government securities which rose from a low of 4.28 percent of the total financial investments in 2020 to a high of 23.43 percent of the total financial investments in 2022,” read the report.

Increased investments in government securities, which Saccos have previously shied away from, are often utilized as security in inter-lending as well as position settlement in the payment systems.

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

The divestiture from placement with NACOs is also being pushed by the continued high demand for loans from members, against low returns associated with such placements.

However, regulated Saccos have continued to patronize the membership of NACOs as evidenced by the 38.28 per cent share increase in the NACOs. 

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

These decreases may be attributed to loss of market value of the shares held in public listed companies as poor performance of the regulated securities, as well as some divestiture.

 Financial investments of regulated Saccos is made up of investment in government securities, placements made with NACOs, shares invested in NACOs, investment shares made in publicly listed companies and investments in other securities such as money markets and units trusts.

By Thuita Jaswant

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