This, it said has weighed down the financial health of Savings and Credit Co-operative Societies (Saccos).
Sasra's latest Sacco Supervision Report shows although the rate of non-remittance eased last year compared to 2020 when it hit a high of Sh5 billion, it was still way above the allowable minimum.
The analysis shows that public universities and tertiary colleges remain the leading defaulters, accounting for Sh1.3 billion in 2021 representing 38.03 per cent of the total non-remitted funds.
"Cognisant that there are 10 Saccos whose members are primarily drawn from the public universities and tertiary colleges. It is clear that sum has the potential of greatly undermining their performance,'' says Sasra.
County Governments and assemblies owed the third highest amount of the non-remitted funds accounting for 18.81 per cent of the total amount.
The regulator termed this as ironic, saying it would have been expected that since the cooperative sector is a constitutional devolved function of the county government, they ought to have been at the forefront of promoting the Sacco movement.
Over the last two years, the government has been employing a multi-pronged policy, legal and administrative measures aimed at reducing the problem of non-remitted funds owed by government institutions to Saccos.
These initiatives included the presidential directive issued in November 2019 designating such non-remitted Sacco funds as pending bills that government entities are required to budget for and give priority.
''It is however evident that the measures being taken are bearing fruits but at a very slow pace, not sufficient to spur the growth of the Sacco sub-sector, thereby calling for a rethink of the measures,'' the report reads in part.
During the year under review, the total deposits grew by 9.80 per cent to reach Sh564.89 billion from Sh514.46 billion recorded in 2020.
The 176-Deposit Taking Saccos had the largest proportion of the deposits amounting to Sh474.25 billion and representing 83.95 per cent of the industry’s total deposits.
The 185-Non withdrawal Deposit Taking Saccos, shared the remaining 16.05 per cent of the total deposits despite outnumbering the DT Saccos.
The subsectors’ gross loans increased by 9.67 per cent in the review period to reach Sh608.75 billion from Sh555.05 billion reported in 2020.
The 176-DT-Saccos’ share of the gross loans was Sh522.25 billion representing 85.79 per cent of the gross loans..
The 185-NWDT-Saccos share of the gross loans amounted to Sh86.5 billion and represented 14.21 per cent of the industry's gross loans.
Notably, high retention of surplus led to increased industry capitalisation during the year giving Saccos the much-needed funding to invest back in the business.
Total membership stood at 5.99 million by end of the financial year with the majority (47 per cent) affiliated to 49-agriculture-based Saccos followed closely by membership from 117-government-based institutions at 35 per cent.
Five top Saccos accounted for almost 50 per cent of the sector's total assets, with Mwalimu Sacco maintaining the top position at Sh60.6 billion followed by Stima Sacco at Sh46.5 billion.
Others are Kenya National Police Sacco whose assets were recorded at Sh44.09 billion, Harambee Sacco Sh34.6 billion and Afya Sacco at Sh20.9 billion.
