In the face of economic challenges, Kenya’s Savings and Credit Co-operative Societies (Saccos) have not just weathered the storm but have achieved a monumental feat, crossing the Sh1 trillion mark in member deposits. This remarkable milestone, unveiled by the State Department of Cooperatives, paints a portrait of resilience and confidence in the cooperative movement.

Defying the Odds

Despite the prevailing economic hardships that prompted some savers to liquidate their investments for daily sustenance, the data reveals an impressive 15.6 percent growth in savings. The figures soared from Sh906 billion to a historic Sh1.047 trillion in the year leading up to June 2023, exceeding the Sh950 billion target set for the period.

The Digital Dawn

A key catalyst for this unprecedented success has been the embrace of digital channels by Saccos, enhancing member confidence and accessibility to financial services. The State Department attributes the achievement to the adoption of these digital tools, underlining the adaptability and forward-thinking nature of the cooperative sector.

Monthly Momentum

What’s truly staggering is the consistent monthly influx of fresh deposits, averaging a robust Sh11.75 billion. This dynamic growth, outpacing the previous year’s 7.1 percent increase, underscores the growing significance of Saccos in the national economy.

The Case for Deposit Guarantee

With the escalating deposits, there arises a pertinent need for a Deposit Guarantee Fund (DGF) to shield savers from potential losses in case of a Sacco collapse. Although the Sacco Societies Act of 2008 provides for a deposit insurance fund, its establishment remains pending.

Saccos vs. Commercial Banks

The soaring growth in Saccos’ deposits is not merely a numerical triumph but also a testament to the higher returns they offer compared to commercial banks. Last year, regulated Saccos paid an average interest rate of 6.92 percent on members’ deposits, dwarfing the three percent offered by commercial banks.

Diversified Growth

Breaking down the numbers, deposit-taking Saccos witnessed an impressive rise from Sh474.25 billion to Sh522.59 billion, exceeding the targeted Sh490 billion. Non-withdrawable deposit-taking Saccos also surpassed expectations, reaching Sh97.86 billion from the projected Sh91 billion.

Beyond Regulation

Beyond the purview of regulatory oversight, other cooperatives closed June with Sh426.55 billion, reflecting a notable 25 percent growth. This emphasizes the widespread appeal and success of the cooperative model beyond the confines of regulated sectors.

Sustaining the Momentum

The success story extends to the members themselves, with Sacco accounts holding more than Sh1 million experiencing a robust growth rate of 29.6 percent. These accounts, now numbering 92,000, collectively hold Sh163.28 billion, highlighting the multifaceted benefits of saving within the cooperative framework.