By David Kipkorir
The Savings and Credit Co-operative Society (Sacco) membership in the country rose from 5.47 million affiliates in 2020 to 5.99 million in 2021, even as dormancy was projected to have dropped from the previous financial year.
The Sacco Supervision Annual Report, 2020, shows that out of the total membership of the sub-sector, 5.54 million members are from the 176 Deposit-Taking (DT) Saccos and 460,785 are from the 185 Non-Withdrawable Deposit-Taking (NWDT) Saccos.
The findings also reveal that a total of 1.18 million members were reported to be dormant among the total membership, implying that these members had not conducted any transactions with their Saccos for a period exceeding six months to the close of the financial period ended December 2021.
The majority of the dormant members were drawn from the DT-Saccos, which had over 1.07 million being classified as dormant, although it is a decline from 1.37 million for the period ended December 2020.
The annual report released by the Sacco Societies Regulatory Authority (SASRA) finds that the dormant members reported by NWDT Saccos substantially increased from 75,272 reported in 2020 to 114,930 in 2021.
It also observed that despite the NWDT Saccos being the majority in number and accounting for over 51.25 per cent of all Saccos in the sub-sector, their proportionate membership accounted for a paltry 7.68 per cent of the sub-sector’s total membership.
DT Saccos on the other hand, which accounted for 48.75 per cent of all the Saccos, had a combined proportionate membership of 92.32 per cent of the total membership in the sub-sector.
The analysis reflects that the average membership in NWDT Saccos is quite low compared to the average membership in DT Saccos.
Saccos, being member-based socio-economic enterprises which thrive better on economies of scale, such low average membership in individual Saccos brings to fore the question of their sustainability; particularly in view of the stiff competition within the financial sector space.
Saccos as co-operative enterprises are formed or founded along unique common bond characteristics such as occupations, profession, industry, and geographical areas of operation, among others membership considerations.
The diverse ranges of fields of membership or common bond characteristics can be classified into four main clusters, which are government-based, agriculture-based, private sector-based and community-based Saccos.
The 2021 annual report shows that the majority of members of Saccos are domiciled within the 49 agriculture-based Saccos, which accounted for a 46.79 per cent of the total membership.
During the year under review, government-based Saccos, composing of 82 DT and 35 NWDT Saccos accounted for the second highest cluster of total membership with a proportion of 35.39 per cent.
It further noted that community-based Saccos comprised of 25 DT Saccos and 63 NWDT Saccos and had a proportion of 10.03 per cent of the entire membership. The 107 private sector-based Saccos, despite being the second highest in number, had the smallest number of memberships at 7.80 per cent of all the members.
Unlike the community-based Saccos, which largely have open field of membership, the majority of private sector-based Saccos have closed fields of membership (bond) mainly derived from the private company or entity in respect of which they draw their membership.
This largely explains the low proportion of their membership, despite their individual numbers being the second highest only after the government-based Saccos, the report indicated.
The increased membership may mean increase in members’ equity in the form of issued and fully paid up shares of common stock as wellasthe total sum of core capital and supplementary capital of a Sacco, reflecting a possible economic growth trajectory.
