Member deposits in savings and credit co-operative societies (Saccos) have crossed the Sh1 trillion mark for the first time, defying the economic hardships that had seen some savers cash out their money to meet daily needs.

Data from the State Department of Cooperatives shows savings grew by 15.6 percent to Sh1.047 trillion in the year to June 2023 from Sh906 billion, marking a major milestone for Kenya’s cooperatives movement.

“Target achieved as a result of improved member confidence and access to financial services through the adoption of digital channels by Saccos,” said the State Department.

The Sh141 billion growth in deposits helped cooperatives surpass the Sh950 billion that had been targeted for the year—pointing to the growing stature of Saccos in the economy as members accumulate savings for a rainy day and also tap loans for development. The latest growth means that Saccos were mobilising an average of Sh11.75 billion in fresh deposits every month despite the prevailing economic hardships punctuated by elevated prices of goods and services and new government deductions.

The pace of growth in deposit mobilisation was faster than in the previous year when deposits grew by 7.1 percent or Sh60 billion.

The growth in deposits reinforces the need for a Deposit Guarantee Fund (DGF) to protect savers from losses on their deposits in case any Sacco collapses.

Kenya’s Sacco Societies Act assented to in 2008, provides for a deposit insurance fund for credit unions, but the scheme has never been established to date. Sasra started operations in June 2010.

Section 55 of the Sacco Societies Act sets the premise for the establishment of a DGF for the Sacco sector to protect members’ deposits of up to Sh100,000, excluding shares, if a society collapses as a result of liquidity challenges or governance.

Savings in deposit-taking (DT) Saccos grew from Sh474.25 billion to Sh522.59 billion at the end of June, being above the Sh490 billion that had been targeted for the period. Savings in non-withdrawable deposit-taking (NWDT) hit Sh97.86 billion from 90.64 billion, surpassing the targeted Sh91 billion.

“Target achieved due to improved member confidence, branch expansion and adoption of alternative service delivery channels by regulated Saccos,” said the Sacco Societies Regulatory Authority (Sasra).