This archive report was first published on 11 October 2021.
Kenya's Savings and Credit Cooperative Organizations (Saccos) proved resilient in the face of Covid-19 hardships, with their loan book growing by 13.41 percent to Sh473.74 billion in 2020.
This marked the fastest jump in four years, surpassing the 15.3 percent rise in 2016, according to a report by the Sacco Societies Regulatory Authority (SASRA).
Despite the economic disruption caused by the pandemic, Saccos continued to lend to their members, with the loan book expanding at a faster pace than that of commercial banks.
Commercial banks' loan book grew by 8.36 percent to Sh3 trillion, while microfinance banks cut their loan book by 3.2 percent to Sh48.85 billion.
The growth in Saccos' loan book was driven by a recovery in the pace of deposits mobilization, which grew at 13.41 percent to reach Sh431.46 billion, marking the fastest pace of growth in this key lending resource since 2016.
However, the pandemic also led to a deterioration in the non-performing loans (NPLs) ratio, which rose from 6.15 percent in the previous year to 8.39 percent in 2020.
The actual gross NPLs jumped from Sh25.79 billion to Sh39.86 billion, highlighting the impact of disrupted income flows for households in the pandemic period.
Despite this, SASRA noted that a majority of Sacco members continued to promptly service their loan repayments, with only a few loans not being serviced in accordance with their contractual obligations.
The latest NPL ratio is above the maximum of five percent prescribed by SASRA, but better off than that of commercial or microfinance banking institutions.
