A new study by Financial Sector Deepening (FSD) indicates that despite the creation of a dedicated industry regulator and laws to professionalise the sector, Kenya’s Sacco industry remains as weak as it was 12 years ago. The competition to increase clients and boost savings has seen many Saccos turn to existing or new members in an attempt to raise capital putting a strain on liquidity. “The net result is a Sacco sector less liquid and even more at risk than it was prior to regulation,” explained the report in part. Several Saccos including Mwalimu, Stima, Harambee and Kenya Police Saccos have grown their balance sheets to rival those of some commercial banks, prompting calls for a more stringent regulation regime for the sector. Industry regulator Sasra has however defended the sector stating that deposit-taking Saccos that constitute a majority of the sector’s assets are in compliance with regulatory requirements.

Source: Standard Digital February 14, 2017 19:07 UTC