More Kenyans Are Now Investing In Saccos

Kenyans deposited Sh76 billion more in savings and credit co-operative societies (saccos) in the year to June 2018, new data by the Treasury shows.

Total member deposits skyrocketed to Sh766 billion over the period up from Sh690 billion in 2017 reflecting an improving investment culture among Kenyans.

The Treasury says the increase in savings is due to strict enforcement of governance and accountability standards in co-operatives and the commencement of operations by the National Youth Service (NYS) Huduma Sacco while analysts say that the spike is due to high dividend payouts and an increasing number of Kenyans opting to leverage on their savings while taking loans to avoid the inconvenience of providing collateral.

“All that sacco members need to do is to save some cash and leverage on that to borrow. Also, returns on annual basis are higher for some of the saccos than commercial banks will offer,” Patrick Mumu, a research analyst with Nairobi-based investment bank Genghis Capital says.

Firms which had outstanding debts to saccos  also paid back Sh1.005 billion as at the end of last June 2018 compared to Sh911 million in the previous fiscal year – an improvement of 10.3 per cent or Sh94 million the Treasury stated.

Unlike in the banking sector, this growth has happened with very little technological interventions. Saccos hold over 40 pc of the GDP and 35 pc of total savings in the country. This means if they are supported further they can easily change our country