SACCO SUPERVISION ANNUAL REPORT, 2023

The Annual Statutory Report on the performance and operations of Regulated SACCOs in Kenya

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Legal Basis

The SACCO Supervision Annual Report is a statutory publication of the Authority prepared and published on an annual basis in fulfilment and compliance with the requirements of Section 22(2) of the Sacco Societies Act cap 490B which provides inter alia that "the Authority shall prepare and submit to the Cabinet Secretary, a report on the operations and performance of SACCO Societies to which the Act applies within four (4) months after the close of the government's financial year".

Section 22(2) of the Sacco Societies Act and Reg. 92 of the Regulations 2020 requires the Authority to prepare and submit to the Cabinet Secretary a report on the performance and operations of Regulated SACCOs in Kenya

SACCO Landscape Overview

DT-SACCOs Operational

174

As at December 2023

Licenses Revoked

2

During 2023

NWDT-SACCOs Operational

183

As at December 2023

At the beginning of the year, there were 176-DT-SACCOs licensed by the Authority to undertake deposit-taking SACCO business. However, in the course of the year, two (2) DT-SACCOs namely M/S Jacaranda SACCO Society Ltd and M/S Kenya Midlands SACCO Society Ltd failed to maintain the minimum requirements for licensing, resulting into revocation of their deposit-taking licenses, leaving 174 DT- SACCOs with valid licenses as at 31st December, 2023.

Financial Performance and Growth

Total Assets

Kshs 971.96B

9.17% growth from 2022

Total Deposits

Kshs 682.19B

9.95% growth from 2022

Gross Loans

Kshs 758.57B

11.50% growth from 2022

Total Membership

6.84M

6.57% growth from 2022

Market Concentration

The market share analysis of Regulated SACCOs total assets shows continued concentration of total assets and total deposits of Regulated SACCOs in just but a few of them. The large-tiered Regulated SACCOs with assets above Kshs 5 billion increased from 47-Regulated SACCOs in 2022 to 53-Regulated SACCOs in 2023, while their proportionate total assets market share increased from 70.05% in 2022 to 73.34% in 2023.

53-Regulated SACCOs with Assets above Kshs 5 billion controlled 73.34% of total assets. 39-Regulated SACCOs with deposits above Kshs 5 billion controlled 65.27% of total deposit liabilities.

Financial Stability Indicators

DT-SACCOs Core Capital

Kshs 133.81B

7.14% growth from 2022

NWDT-SACCOs Core Capital

Kshs 14.46B

35.77% growth from 2022

DT-SACCOs CCA Ratio

16.07%

(Regulatory minimum: 10%)

DT-SACCOs ICA Ratio

9.11%

(Regulatory minimum: 8%)

Loan Portfolio Quality

Performing Loans

86.33%

of total loan portfolio

NPL Ratio (Overall)

8.45%

8.34% in 2022

DT-SACCOs NPL Ratio

8.66%

8.40% in 2022

NWDT-SACCOs NPL Ratio

7.12%

7.99% in 2022

Non-remitted funds remain a major contributor towards NPLs, with Kshs 2.57 billion owed by various employer institutions to Regulated SACCOs in 2023.