Mbabane– The Savings and Credit Co-operative Societies (SACCOs) sector recorded modest growth in total assets during the latest reporting period, supported by stronger liquidity positions and continued expansion in lending activity.
According to the latest sector performance data, SACCO industry assets increased marginally by 0.12% quarter-on-quarter to reach E3.35 billion, up from E3.34 billion in the previous quarter. On an annual basis, total assets grew by 11.22%, reflecting broad-based growth across major asset classes.
The increase in assets was largely driven by a sharp rise in cash and cash equivalents, which surged by 59.93% during the quarter. Prepayments and sundry receivables also posted strong growth of 67.49%.
Net loans remained the dominant asset class in the sector, accounting for 71.13% of total industry assets. The net loan portfolio increased by 0.85% during the quarter and expanded by 6.72% year-on-year, underlining sustained credit demand within the cooperative financial sector.
Loans and advances grew from E2.40 billion to E2.45 billion during the quarter, representing a 0.92% increase. Compared to the same period last year, the loan book expanded significantly by 6.55% from E2.28 billion recorded in Q4 2024.
The sector also registered improvements in loan quality, with performing loans increasing by 1.68%. Higher-risk loan categories declined notably during the period. Renegotiated loans fell by 28.29%, while loans classified as losses dropped by 35.28%. Loans in the watch category also declined by 6.51%, reversing trends observed in the previous quarter.
Portfolio at Risk (PAR), a key indicator of loan delinquency, continued its downward trend. The sector’s PAR ratio declined by 0.40 percentage points over the quarter and improved significantly on an annual basis, falling from 5.05% to 4.19%.
The sustained decline in PAR reflects stronger credit risk management practices and improved repayment behaviour among borrowers, pointing to increased resilience in the SACCO sector.
Liquidity levels also remained stable, with the sector maintaining a liquidity ratio of 10.02%, comfortably within the regulatory limits prescribed by the Financial Services Regulatory Authority (FSRA).
Meanwhile, financial investments weakened during the quarter, declining by 11.48% to E446.49 million from E504.38 million previously. Despite the decline, the investment portfolio remains heavily concentrated in instruments managed by asset managers, which account for more than 80% of total financial investments.
The share of equity investments continued to shrink, falling from 5.83% to 5.17% of total financial investments, suggesting a continued shift away from direct equity exposure toward professionally managed investment allocations.
Sector asset composition also shifted during the quarter, with declines recorded in the share of cash holdings and net loans by 3.52 and 0.52 percentage points respectively. Non-earning assets increased marginally by 2.29 percentage points, while financial investments rose by 1.75 percentage points within the overall asset structure.
The latest figures indicate that despite softer investment performance, SACCOs continue to strengthen their balance sheets through steady loan growth, improving asset quality, and prudent liquidity management.
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