The performance of Regulated SACCOs in Kenya has shown significant growth across several key indicators despite challenges in remittances and a slight slowdown in loan growth rates.

According to the 2023 SACCO Supervision Annual Report, SACCOs saw a notable increase in assets, loans, and deposits, showcasing resilience in the financial sector.

The report indicates that total assets for Regulated SACCOs grew by 9.17 per cent, reaching Sh971.96 billion in 2023, up from Sh890.30 billion in 2022.

 This growth, though slightly lower than the 10.31 per cent rate recorded in 2022, highlights the continued confidence in SACCOs' ability to generate value for their members.

Deposits also increased, with cumulative totals growing by 9.95 per cent in 2023 to Sh682.19 billion from Sh620.45 billion in 2022.

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This growth rate was a slight improvement from the 9.84 per cent seen in the previous year, reflecting members' trust and reliance on SACCOs for financial services.

The gross loan portfolio expanded by 11.50 per cent to Sh758.57 billion in 2023 from Sh680.35 billion in 2022.

While this growth marked a slight decrease from the 11.76 per cent recorded in 2022, it still underscores a strong demand for credit, particularly within the Non-Withdrawable Deposit-Taking SACCOs (NWDT-SACCOs) segment.

 NWDT-SACCOs experienced a faster loan growth rate of 12.85 per cent in 2023 compared to 8.90 per cent in 2022.

In contrast, the Deposit-Taking SACCOs (DT-SACCOs) saw their loan growth rate decline from 12.24 per cent in 2022 to 11.28 per cent in 2023.

The report also highlights concerns over non-performing loans (NPLs) in the SACCO sector.

The NPL ratio stood at 8.45 per cent in 2023, reflecting the financial strain some members faced in meeting their obligations.

The proportion of loans classified as 'loss,' meaning they had not been repaid for over a year, increased significantly from 3.38 per cent of gross loans in 2022 to 4.79 per cent in 2023.

This increase was primarily driven by defaulted loan repayments, many of which were tied to non-remitted deductions by various employers.

Despite these challenges, the membership of Regulated SACCOs grew by 6.57 per cent, reaching 6.84 million in 2023 from 6.42 million in 2022.

This growth occurred even though the number of SACCOs decreased slightly from 359 in 2022 to 357 in 2023.

Looking forward, the SACCO Regulatory Authority (SASRA) remains optimistic about the sector's future.

They project continued growth in 2024, driven by a strong regulatory framework, robust demand for credit services, and increased member engagement.

However, the report also cautions that economic challenges and stiff competition from other financial service providers could dampen the rate of deposit mobilisation, potentially forcing SACCOs to seek external funding.