Police SACCO doubles capital levels as sector struggles with defaults

Kenya National Police Deposit-Taking Savings and Credit Cooperative Society has doubled its capital ratios compared to the industry average, even as most SACCOs and banks continue to face high loan defaults.

The Johannesburg-based Global Credit Ratings on Monday, April 28, reaffirmed the SACCO’s long-term rating at A-(KE) and short-term rating at A2(KE), both with a stable outlook.

The agency said the SACCO showed a strong capital base, stable member funding and consistent performance.

As of Sunday, December 31, the SACCO’s core capital to total assets ratio stood at 33 per cent, more than double the 2023 industry average of 16.1 per cent.

Its core capital to deposits ratio was 64 per cent, far above the 8 per cent regulatory minimum.

The SACCO’s non-performing loan ratio stood at 2.4 per cent in 2023, sharply lower than the banking sector’s 14.9 per cent and the SACCO industry average of 8 per cent.

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“Our financial strength reflects our commitment to disciplined growth and focused credit oversight,” said Chief Executive Officer Solomon Angutsa.

“We aim to deliver affordable loans while promoting a strong savings culture among our members,” he added.

Kenya National Police DT SACCO is ranked third among 174 licensed deposit-taking SACCOs by asset size.

It reported Sh54 billion in total assets in 2023, with gross loans rising 10.9 per cent to Sh51.9 billion by 2024.

Membership grew to 74,305 in 2024, largely made up of police officers and civil servants. Its loan penetration rate stood at 46.2 per cent as of December 31.

GCR noted that funding stability remained high, with 90.2 per cent of deposits in the form of long-term, non-withdrawable savings.

The SACCO’s liquidity ratio was 61 per cent, well above the 15 per cent regulatory threshold.

Net interest income accounted for 82 per cent of total revenue in 2023, underlining its reliance on lending activity.

Angutsa said the SACCO would continue focusing on financial inclusion, efficient operations and member-driven services under its 2025–2029 strategic plan.