There are more than 2,286 non-deposit taking saccos operating in Kenya, holding in excess of Sh153.2 billion in assets.
This is according to a report by the International Monetary Fund, that sheds light on the huge size of the societies that are not regulated by the Sacco Societies Regulatory Authority (Sasra).
An IMF technical team that was in Nairobi in August 2019 was also able to find out that they had given out loans of up to Sh118.22 billion and had taken up deposits of up to Sh117.50 billion.
Treasury data shows that as at the end of June 2018, Saccos regulated by Sasra held Sh766 billion in assets.
Previous IMF missions in 2015 and 2016 discussed the possibility of including non-deposit taking Saccos in monetary data.
The IMF said the financial data, which covered the period of up to end of 2017, was arrived at after concerted efforts by the Commissioner for Cooperative Development (CCD) — who regulates non-deposit taking societies— and Sasra, which only regulates deposit taking Saccos.
The numbers are likely to have gone up in the past two year though.
“At the time of the previous missions, no information was available to be able to assess their size including total assets and deposits as non-deposit-taking Saccos did not regularly report their balance sheet data to the CCD,” said the IMF team.
“Given their relatively large size, the IMF mission recommended that the Central Bank of Kenya pursue further collecting more detailed balance sheet data for non-deposit-taking Saccos to assess the feasibility to include them in the monetary data in cooperation with Sasra.”
The loose regulation and large asset base of the non-deposit taking societies therefore poses a significant risk to the economy, in contrast with their deposit-taking counterparts under Sasra who are required to submit timely audits and hold reserves to back their levels of risk.
For instance, Ekeza Sacco where Sh1 billion saved by over 78,000 members could not be accounted for, demonstrated that lax controls is risking hundreds of billions collected from ordinary Kenyans.
In 2017, CBK and Sasra warned Kenyans against Ponzi-style investment schemes by some rogue co-operative societies.
“Such entities entice members of the public to place money with them and promise quick and abnormally high returns on their money or acquisition of non-existent properties,” the joint statement read.