DT SACCOS HAVE COME OF AGE

Stima DT Sacco Board Members during an investors’ briefing held after releasing the 2023 financial year results.
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Kenya’s co-operative movement is quite vibrant. It is ranked the top in Africa and seventh globally.  Given its huge potential in unlocking economic opportunities for millions of households across the country, the government is very keen on enhancing its   growth. In that regard, the Cabinet approved the 2023 Co-operative Bill in October last year. It is currently before Parliament. Among other things, the Bill is aimed at strengthening the governance framework for co-operatives and safeguarding the members’ funds through enhanced regulation and supervision.

 Standing out in this movement are the deposit taking savings and credit co-operative societies (DT Saccos).  They are emerging as a force to reckon with in Kenya’s financial sector. Going by their results in the 2023 financial year, DT Saccos are fast growing in membership and profitability. Undoubtedly, they are becoming more and more attractive to members from all walks of life   due to their innovative products and services, democratic governance and open door policy.

One common feature among the giant tier one Saccos in the country is that almost all of them started as small outfits – with a handful members, limited   capital and skeleton staff.  Nevertheless, through sheer hard work, focus and customer friendly business models, they have been able to scale up in a phenomenal way. It is worth noting that DT Saccos pay dividends on share capital and interest on non-withdrawable deposits to their members every year, based on their financial performance.  Against that background, many members who are keen on achieving financial success have joined them.

Significantly, plans are underway to establish a Central Liquidity Facility through which Saccos will be admitted into the national payment system. This is in line with the government’s financial inclusion agenda.  According to the 2022 Sacco Supervision Report by the Sacco Societies Regulatory Authority (SASRA), the total assets of the regulated Saccos in Kenya as at 31st December 2022 was Kshs. 620.45 billion. The total deposits on the other hand  stood at Kshs. 620.45 billion. This is another indication that the sub-sector has come age.

As the DT Saccos continue strengthening their governance structure, rolling out innovative products, digitizing their business models and opening more branches in line with their expansion agenda, they are bound to register even better results. They therefore need more support from the government and   its agencies at both the national and county levels. There are no options.

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