Top 15 SACCOs in Kenya as of 2015: By Asset and Deposit Base

TOP 15 AS AT 2015

Kenya’s SACCO sector has experienced tremendous dynamism especially with respect to deposit-taking (DT) SACCOs. Over the last four years, the numbers of DT SACCOs have showed interesting movements with the operating licenses of some DT SACCOs being revoked by the regulator while others are issued with tentative licenses as they boost their capital or liquidity. 

Within this period, we have also seen one DT SACCO being placed under Statutory Management due to liquidity among other reasons. These happening demonstrate the upheavals within the DT SACCO sub-sector hoping for stability to come with time.




Among the reasons cited for license revocation or restricted licensing include:

• Failure to meet or maintain minimum core capital and capital adequacy ratios;
• Perpetual illiquidity
• Severely under-capitalization (negative equity)
• Inability to meet obligations to depositors and third parties
• Unsustainable high external borrowing

Nevertheless, we still observe a number of new applications by SACCOs into the DT SACCO league and hope to see more in the near future.

In this issue, we perform a comparison of top 15 DT SACCOs by total asset and deposit base as of 2015 and 2013. It is interesting to note that the total asset base of the top 15 DT SACCOs has grown upwards by 36% from 2013 to 2015. This is a remarkable improvement and a demonstration of the growth being experienced in the DT SACCO sub-sector.

The summary below shows jostling amongst the top-tier DT SACCOs for the top 15 positions. The only new entrant into the top 15 DT SACCOs is Hazina SACCO, which replaced Magereza SACCO. The flamboyant teacher-based (now open to the public) DT SACCO, Mwalimu National rests comfortably at the top followed by Harambee SACCO. An interesting upward movement has been noted for Invest and Grow (IG) DT SACCO, which was formerly Kakamega Teachers SACCO (Kateco). The SACCO has moved to position 12 from position 15 in 2013. This may be attributed to the re-branding done which has exposed the SACCO to more membership hence more funds.

I have argued in my name change paper that there seems to be benefits felt after DT SACCOs change their name and on average, this seems to be felt within four years. For a detailed review of the paper, please visit: http://www.emeraldinsight.com/doi/full/10.1108/MRR-04-2015-0097.

We foresee more interesting dynamics especially in the DT SACCO sub-sector in the next few years with risk management taking centre stage in the sector. This expectation is informed by the regulatory changes experienced in the SACCO sector and the Commercial Banking sector, where we have witnessed interest capping for banks and restricted revenue diversification avenues for SACCOs. 

It is a wait and see moment...

By: Dr. David Mathuva