Land, housing take 33pc of fresh Sacco loans in affordable homes drive
Land purchases and home ownership plans accounted for a third of fresh credit advanced by savings and credit cooperative societies (Saccos) last year.
Data published in the annual Sacco Societies Regulatory Authority (SASRA) report for 2022 reveals that land and housing-related borrowing accounted for 33.2 percent of new loans last year.
The figure represents growth from 26.9 percent recorded in 2021 showing the aggression by Saccos in empowering its members to acquire land and houses.
The preference for lending towards land and housing has been based on the incremental mortgage lending model by the institutions that help them manage liquidity as they mitigate risk.
The incremental lending model is different from conventional mortgage used by commercial banks as it is premised on short-term credit facilities of between three to five years
SASRA in the report also acknowledged the partnership of Kenya Mortgage Refinance Company with selected institutions as another driver of increased lending to housing.
Lending for education purposes accounted for 22 percent of new credit last year up from 20.8 percent in 2021.
Agriculture, Kenya’s largest sector by output accounting for a fifth of Kenya’s economy recorded a drop in its proportion of credit by Saccos.
Proportion lent to agriculture dropped by 3.7 percent points to 13.76 percent, the drop was attributed to erratic weather patterns dominated by one of the worst droughts experienced in Kenya.
The figure represents a growth from 26.97 percent in the previous year. According to the regulator’s report, the country had 359 regulated Saccos.
Deposit-taking Saccos stood at 176 while the number of Non-Withdrawable Deposit-taking Saccos dropped by two to 183.
Cumulatively the institutions reported an 11.8 percent growth in lending to Sh680.4 billion beating the previous year’s growth of 9.67 percent.
Customer deposits from the institutions grew by 9.8 percent to Sh620.4 billion buoyed by the economic recovery from the pandemic.
The number of active members in deposit-taking Saccos posted an 8.5 percent growth to 4.8 million while total Sacco membership grew to 6.4 million. BY BUSINESS DAILY
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