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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 remain 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.

 Clustering of DT-SACCOs based on original fields of membership.

 Original Common Bonds

 

Total Assets in Kshs Millions

% to total assets

Total Deposits in Kshs Millions

 Percentage to total deposits

Net Loans in Kshs Millions

Percentage to total net loans

Members

Percentage to total members

Government-Based

       149,719.9

38.0%

            106,677

39.1%

             116,418

40.3%

             550,677

15.2%

Teachers-Based

       135,820.0

34.5%

              90,679

33.3%

               99,454

34.4%

             715,764

19.7%

Farmers’-Based

          54,236.8

13.8%

              35,486

13.0%

               32,125

11.1%

          1,886,599

51.9%

Private sector-Based

          43,648.9

11.1%

              32,252

11.8%

               32,694

11.3%

             226,717

6.2%

Community-Based

          10,073.2

2.6%

                 7,485

2.7%

                  8,230

2.8%

             252,840

7.0%

TOTAL

       393,498.7

 

            272,579

 

             288,921

 

          3,632,597

 

 Source: SASRA Database 2016

 For more details download a copy of the Sacco Supervision report via this link

 

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