Kenyan Savings and Credit Cooperative Societies (Saccos) Report Increased Lending for Land and Housing
Data from the annual Sacco Societies Regulatory Authority (SASRA) report for 2022 indicates that land purchases and home ownership plans accounted for 33.2% of the new credit advanced by savings and credit cooperative societies (Saccos) in Kenya last year.
This figure represents significant growth from the 26.9% recorded in 2021. Saccos have become increasingly aggressive in empowering their members to acquire land and houses, with the preference for lending towards land and housing based on the incremental mortgage lending model.
This model differs from conventional mortgages used by commercial banks, as it relies on short-term credit facilities of between three to five years. Additionally, partnerships between Saccos and the Kenya Mortgage Refinance Company have driven increased lending to housing. Meanwhile, lending for education purposes accounted for 22% of new credit in 2022, up from 20.8% in 2021, while lending to agriculture dropped to 13.76% due to erratic weather patterns, including severe drought.
