About 1.2 million Kenyans ceased channeling savings in their SACCO accounts for over six months in the period ended December 2021, a scenario attributable to financial woes associated with the Covid-19 pandemic.
The annual Sacco Societies Regulatory Authority (Sasra) report shows that dormant accounts in Deposit Taking Saccos (DTs) numbered 1.07 million while Non-Withdrawable Deposit Taking Saccos (NWDTs) posted 114,930 inactive accounts in the period under focus.
The dormancy rate for DTs was, however, an improvement from 2020 when the segment reported a total of 1.37 million inactive member accounts at the height of Covid-19 pandemic.
Conversely, the 2021 dormancy ratio for NWDTs worsened by 53 percent relative to 2020.
“Unlike the DT-SACCOs segment in respect of which the dormant members declined substantially, the dormant members reported by NWDT-SACCOs substantially increased from 75,272 members reported in 2020 to 114,930 members reported in 2021,” the report reads in part.
Further, data by Sasra indicates that customer activity in the two types of Saccos was yet to revert to pre-pandemic levels.
The survey notes that public universities and tertiary colleges continued being the greatest defaulters in terms of non-remitted funds owed to SACCOs, which amounted to Kes1.30 billion in 2021 representing 38.03 percent of the total non-remitted monies.
“Cognizant that there are 10-regulated SACCOs whose membership are primarily drawn from the public universities and tertiary colleges, it is clear that a sum of Kes1.30 billion being owed to just 10-SACCOs has the potential of greatly undermining their performance,” the survey explains.
Sacco loans also performed poorly in 2021 with bad loans swelling to Kes54.73 billion out of the industry’s Kes608 billion loan book.
NPLs for DTs ticked up by 16 percent to Kes46.27 billion while redundant loans for NWDTs were valued at Kes8.46 billion. NPL ratio for DTs 8.69 percent and 9.78 percent for NWDTs, indicating a poorer showing in the NPL metric for the latter.
The suppressed ability for Sacco members to service their loans is in step with challenging market conditions facing workers and businesses alike as the economy gradually smarts from the carnage of the pandemic.
Sasra also announced the discontinuation of four saccos for failure to meet operational requirements; these are Comoco, Nyamira Tea, Nyanyuki Equator and Uchongaji saccos.
Despite the notable hits in overall performance, Saccos also registered positive trends in other metrics. Membership grew by 3.3 percent to 5.99 million savers up from 5.82 million in 2020.
Further, deposits surged by 9.8 percent to Kes564.89 billion; deposit taking Saccos held Kes474.25 billion while non-withdrawable deposit-taking Saccos collected Kes90.64 billion.
Overall, Sasra is projecting a sustained growth rate in key parameters of growth and stability this year, riding on continued the relaxation of the COVID-19 protocols and restrictions which shall allow the economy to operate at its full potential.