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The DT-SACCO segment of the Kenyan SACCO subsector continued to play its rightful roles of savings mobilization; access to credit facilities; as well as improving financial deepening with regard to access and inclusion in the year 2016/17.


During the year 2016, a total of 177 DT-SACCOs were licensed to undertake deposit-taking Sacco business in the country in accordance with the Act, but two (2) DT-SACCOs were de-licensed in the course of the year leaving a total of 175 DT-SACCOs in operation at the end of 2016.

Only one (1) new DT-SACCO was licensed in the course of 2016, out of the six (6) applications that were pending before the Authority.  The Authority rejected three (3) other applications for deposit taking licenses, while the remaining applications are at various stages of processing. This brought to a total of 176 DT-SACCOs under the supervisory jurisdiction of the Authority.

A total of thirteen (13) DT-SACCOs were granted half-year restricted licenses in 2016, due to various compliance issues, and the licenses were subject to extension for the remainder part of the year subject to full compliance with the prescribed regulatory standards, except the two (2) whose licenses were revoked.


The total membership of persons registered as using the financial services of DT-SACCOs stood at 3.6 Million persons in 2016, out of whom about a half-million are reported to have been inactive. These members are distributed in various proportions among the 176 DT-SACCOs, which were licensed and operational in the country as at the end of December 216.

Financial performance

The Kenyan DT-SACCO segment remained robust with regard to all the parameters on growth performance. The total asset base of the DT-SACCOs grew in 2016 to reach Kshs 393.49 Billion, as compared to Kshs 342.84 Billion recorded in 2015. This represented a 14.8% year to year growth rate, and was funded principally by members’ deposits which also grew by a similar percentage to reach Kshs 272.57 Billion in 2016 from Kshs 237.44 Billion recorded in the previous year.

The loans and advances constituted a huge portion of the total assets, accounting for 73.42% of the total assets and which stood at Kshs 288.92 Billion in 2016 up from Kshs 251.08% in 2015. This represented a 15.1% year to year growth rate.

The gross loans on the other hand stood at Kshs 297.6 Billion in 2016, up from Kshs 258.18 Billion in 2015 representing a 15.3% year to year growth rate. The capital reserves by the DT-SACCO segment also grew to Kshs 61.26 Billion from Kshs 50.83 Billion registered in the previous year.

Financial soundness and stability of the DT-SACCO system

Capital adequacy, asset quality, earnings and liquidity remains the key criteria for monitoring, evaluating and measuring the financial soundness and stability of the DT-SACCO system.

Whereas there was improvement in the aggregate core capital held by DT-SACCOs which increased to Kshs 54.94 Billion in 2016 from Kshs 41.71 Billion in 2015, against the prescribed limit of Kshs 10 Million; there were mixed results in the level of individual compliance with the three prescribed capital adequacy ratios, as follows:

a)      168 DT-SACCOs were able to fully maintain the prescribed core capital of Kshs 10 Million, with the remaining seven (7) DT-SACCOs failing to maintain the standard.

b)     144 DT-SACCOs were able to fully maintain the prescribed core capital to total assets ratio of 10%, with the rest having ratios of below the prescribed threshold.

c)      169 DT-SACCOs were able to fully maintain the prescribed ratio of core capital to total deposits ratio of 8%, with the rest having ratios of below the prescribed threshold.

d)     Only 69 DT-SACCOs were able to maintain and comply with the prescribed institutional capital to total assets ratio of 8%, with the majority of DT-SACCOs failing to comply with this key regulatory minimum.

Loans remains the key assets for DT-SACCOs comprising 73.42% of the total asset base. This calls for consideration of the quality of the loan portfolio of DT-SACCOs, with adequate safeguards to provide for any non-performing portfolios. The total loan portfolio at risk, measured as a ratio of the non-performing loans to gross loans increased to 5.23% from 5.12% registered in 2015. This was driven mainly by the increase on the non-performing loans from Kshs 13.21 Billion in 2015 to Kshs 15. 57 Billion in 2016.

The ratio is above the WOCCU recommended maximum of 5%, and far much higher than the Authority’s recommended maximum of 3%; and thus calls for more concerted efforts in credit management strategies by DT-SACCOs.


Comprehensive liquidity management policy remains a critical tool for monitoring and managing liquidity risks among the DT-SACCOs, particularly in the absence of a national framework for a central liquidity facility. This includes the prescribed minimum ratio of 15% which in the aggregate stood at 49.95% in 2016 down from 55.90% registered in 2015.

However, it is observable that despite the impressive liquidity measurement being registered in successive years over and above the prescribed minimum, many DT-SACCOs are often unable to meet their short term obligations to their members, particularly the disbursement of loans. This irony is occasioned by the fact that the bulk of liquidity pressures in DT-SACCOs are normally occasioned by demand for loans, which once a member is qualified is deemed a right, unlike in the banking sector. This irony calls for a review of the prevailing regulatory definition of liquidity ratio and the Authority shall be engaging the stakeholder to find a practical and realistic regulatory definition that addresses the needs of the industry.


The total deposits to total loans ratio remained unchanged at 108% during the year 2016; and as reported in the previous years, this ratio is much higher than the WOCCU recommended range of 70% to 80%. The fact that DT-SACCOs have continued to lend much more than the deposits that they mobilize continues to hamper their liquidity, as many DT-SACCOs are forced to borrow from external sources in order to meet the shortfall.

Proactive measures to address this imbalance have been mooted both at the policy and legal levels, including increasing consumer confidence in DT-SACCOs to attract more deposits, as well as incorporating DT-SACCOs in the national payment system.

Contribution to financial access and inclusion

In order to reach their ever expanding breadth and width of their membership with their financial services, DT-SACCOs have continued to open new branches in different parts of the country, as well as embracing the use of technology driven service delivery channels. There were a total of 424 DT-SACCOs branch networks spread across the country, in addition to the 176 head office locations which are themselves also delivery channels. This makes a total of 600 physical office delivery channels for financial services presented by DT-SACCOs to the Kenyan population.

Only the counties of Mandera, Garissa and Wajir did not have the physical presence of a DT-SACCO in one form or the other. Nairobi County still has the highest physical concentration of DT-SACCOs with 41 head offices, and 23 different branch networks – making a total of 64 physical delivery channels offered by DT-SACCOs to Kenyans. The county of Kiambu has the second highest physical concentration of DT-SACCOs, with 15 head offices and 38 branch networks, making a total of 54 physical delivery channels offered by DT-SACCOs to the Kenyan population. The County of Meru follows closely with a total of 51 physical delivery channels, composed of 14 head offices and 37 branch networks.

In addition to the physical offices, DT-SACCOs are progressively using ATM and mobile application services as a tool for the efficient provision of their services. Out of 176 DT-SACCOs, only 65 DT-SACCOs had by December 2016 not connected themselves to any form of ATM services. The majority of ATM services are however offered by the Cooperative Bank of Kenya. On the other hand, a total of 104 DT-SACCOs had adopted and were using one mobile application service or the other in the provision of their financial services, particular withdrawal, deposit, and account inquiry services.

SACCO agencies are another evolving delivery channel being embraced by DT-SACCOs in an attempt to increase accessibility of their financial services to their membership. Though a new delivery paradigm hitherto unknown among DT-SACCOs, SACCO agencies is fast gaining acceptance among DT-SACCOs with 90 SACCO agents being recorded among just 12 DT-SACCOs, and transacting over Kshs 300 Million worth of transactions in 2016.

There is no doubt that the use of SACCO agents as delivery channels shall greatly enhance the deepening of DT-SACCO financial services; as well as save the DT-SACCOs from the otherwise capital intensive brick and mortar branches. The Authority is thus developing specific guidelines, which shall not only encourage the SACCO agency concept, while addressing the risk associated therewith.

Policy developments

The Authority continued to play its critical role in contributing towards the development of policies and legal frameworks aimed at strengthening the national financial system. This is premised on the critical role that SACCOs continue to play towards the realization of the Kenya Vision 2030, especially with regard to savings mobilization, access to credit, financial access and inclusion. In this regard, the Authority made key contributions to the National Budget Policy Statement for 2016/2017, which led to the publication of the Sacco Societies (Amendment) Bill, 2016 and which is currently before Parliament for enactment.

…… Ends…..


John Mwaka


Date: 28th September, 2017


Background information

The Sacco Societies Regulatory Authority (SASRA) is a state corporation established under the Sacco Societies Act, 2008(Cap 490B). The principal mandate of the Authority is to license and supervise Sacco Societies to undertake deposit-taking Sacco business (popularly known as Front Office Service Activity or FOSA) in Kenya.

The Sacco Societies Annual Supervision Report is a statutory report prepared and published by the Authority on an annual basis pursuant to Section 22 of the Sacco Societies Act No. 14 of 2008.  It requires the Authority to prepare and submit to the Cabinet Secretary a report on the operations and performance of the Sacco societies in respect of which the Sacco Societies Act applies within three (3) months after the close of the fiscal year.        


Vision 2030
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