The government is committed to deepening the ability of savings and cooperative societies to offer loans to Kenyans, Cooperatives Cabinet Secretary Wycliffe Oparanya has said.
Oparanya noted that the sacco industry has continued to grow, despite operating under difficult economic conditions and policy and market limitations.
He was speaking during the unveiling of the 2023 Annual SACCO Supervision Report on Wednesday.
The report said the loan portfolio in 2023 increased by 11.50 per cent to reach Sh758 billion; a marginal decline from 11.67 per cent recorded in 2022.
“Although the report shows that there was an increase in the growth rate of deposits by 9.95 per cent in 2023 compared to 9.84 per cent in 2022; this growth remains behind that of the loan portfolio which recorded a 11.50 per cent growth. Thus the financing gap for loans was financed primarily through member share capital and retained earnings,” Oparanya said.
The 2023 Annual SACCO Supervision Report highlighted that the total membership among the 357-regulated saccos increased by 6.57 per cent to 6.84 million in 2023 from 6.42 million reported in 2022.
“This is a commendable growth rate but we must not forget that it represents just under 30 per cent of the total adult working population in Kenya. From the World Council of Credit Unions statistics report, there are countries with over 40 per cent penetration rate. Thus there is huge room for growth for Kenya Sacco Industry,” the CS said.
Oparanya noted that his ministry has continually reviewed the legal and regulatory framework governing leadership and management of saccos.
“But this still has not eliminated mismanagement and other corrupt practices by some cooperative leaders. Thus it is my submission that dealing with mismanagement cannot be the business of government alone,” he stated.
He called upon the sacco industry to quickly align itself to the policy vision of the government as captured in the Cooperative Bill 2024 where a federation of saccos is proposed.
“Like other industry associations, I will expect the federation to be the custodian of good governance as it has both the legal and moral authority given the huge public interest saccos as deposit taking financial institutions carry,” Oparanya said.
He said the sacco industry through a federation must own, promote and uphold good governance practices through public education and self-regulation with Government left to intervene and enforce compliance for any transgressions.
He revealed that the ministry is exploring policy options to include expanding jurisdiction of the Cooperative Tribunal to cover disputes between cooperatives and employers so as to expedite the resolution of non-remittance cases.
