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Kenya

SACCOs show resilience to grow deposits despite COVID-19

NAIROBI, Kenya, Feb 26-SACCOs showed great resilience to return impressive results last year, despite the disruptive effects of COVID-19.

New data by the Saccos Societies Regulatory Authority (SASRA) show that member deposits rose 13.31 percent on average between 2019/2020 to reach Sh431.09 million, compared to 11.27 percent between the years 2018/2019.

“A number of SACCOs were adversely affected by job losses, pay cuts, and unmitigated shifts in the financial priorities of households, which relegated loan repayments to the back burner. But they have shown great resilience, which ensured stability in the sub-sector. At SASRA, we formulated and implemented several measures to cushion the SACCOs that we currently regulate,” said SASRA CEO John Mwaka, while issuing the performance data.

Among the measures that SASRA implemented to cushion SACCOs against the adverse effects of the COVID-19 pandemic were the suspension of AGMs last year; online approval of SACCO’s audited accounts and allowing SACCOs to restructure member loans.

The sub-sector regulator also said it reviewed the frequency of submission of liquidity and risk classification and asset provisioning returns.

Most adversely affected by the pandemic were SACCOs that operate in businesses that rely on local and international travel, the first and biggest victims of the initial restrictions imposed by governments the world over, including Kenya, to stem the tide of infections a mid-last year; Aviation, Hospitality, Transport, and Horticulture.

Other key performance indicators in the sub-sector showed an upward trend, albeit at a slower pace.

There was growth in assets, evidenced by an increase on the annual average growth rate of 13.31 percent in the years 2019/2020 to reach Sh630.8 million, compared to 12.41 percent in the years 2018/2019.

Gross loans, maintained a steady rise from an average growth rate of 12.1 percent between the year 2018/2019 to 13.14 percent between the year 2019/2020, to hit Sh474.69 million.

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The regulator is using the occasion to educate leaders of Non-Deposit Taking SACCOs on the SACCO Regulations 2020, whose aim is to bring such SACCOs under the regulatory mandate of SASRA.

Currently, SASRA regulates some 172 Deposit-Taking SACCOs.

The Regulations 2020, which came into effect from January 1 this year, aim at bringing prescribed Non-Deposit Taking SACCOs under the regulatory ambit of SASRA.

 

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