SACCOs in Kenya plays critical role in mobilizing savings from the members. At the same time, these SACCOs offer loans to members at competitive interest rates in the background of other more favorable terms and conditions. Hence, deposits and loans portfolios have been growing into millions of Kenya shillings on daily basis. With such huge portfolios and positive impact the SACCOs make in the Kenyan economy, they must “ do- right- their- businesses” to avoid financial catastrophe recently faced by the Silicon Valley Bank (SVB) of US which collapsed in March 2023.
In Kenya, two SACCOs regulatory bodies ensure SACCOs “do-right-their businesses” :
- Sacco Societies Regulatory Authority (SASRA) which regulates the Deposit-Taking SACCOs (DTS) and regulated Non-Withdrawable-Deposit Taking SACCOs whose assets are KES 100 million and above. DTS operate like banks in that they have some savings products which allow customers to deposit and withdraw as one wishes.
- State Department of Co-operatives which regulates, through the Counties Cooperative Departments, all the Non-Deposit Taking SACCOs with assets value of less than KES 100 million. Non-Deposit Taking SACCOs are those which do not allow withdrawal of savings until one ceases to be a member of the SACCO. Such SACCOs are small in terms of membership, deposits, and loan portfolios.
The bigger picture of German Cooperative and Raiffeisen Confederation (DGRV)/German Kenyan Cooperative Development in Narok County is to strengthen the way non-deposit taking SACCOs conduct their business by improving the supervisory capacity of co-operative officers, supervisory committee, and cooperative auditors. Consequently, in January 2023, the Directorate of Cooperative Development (Narok County), and DGRV/GKCD completed the development of “Non-Deposit Taking SACCOs Supervision Tools” for use by the co-operative officers, supervisory committee, and cooperative auditors.
We had the fourth pilot-test of supervision tools for cooperative officers namely Centralized NDT SACCO Data Bank-Gives the bioinformation, County NDT SACCO Loan Book-Gives performance of individual/total loan portfolio/s of the SACCO/s and County NDT SACCO Deposit Book- Gives performance of individual/total savings portfolio/s of the SACCO/s.
Data was collected from 9 SACCOs in Narok North, Narok County. The SACCOs were; Mau Washindi, Nafugo, Yamua, Narok Central HealthPartners, Golden Chance, Nasaruni, Gospel Power, and Narok Fleet Transporters. During the test, it was observed that the saccos have improved in the way they are reporting their key businesses (Membership, Loan and Savings) after the intervention. In addition, the cooperative officers have been able to easily identify and advise on the paint points in the SACCOs.
