Sustainability of Microfinance: A Case of Tea SACCOs in Kericho, Buret and Bomet Districts of Kenya

Tea SACCOs are tea based rural SACCOs formed by tea growers, whose functions are to keep member’s savings in form of shares, savings accounts and deposit accounts among others. Little is known about the factors influencing financial sustainability of Tea SACCOs. The study covered all six Tea SACCOs in Kericho, Bomet and Buret districts in the Rift valley province of Kenya. Analysis involved evaluating growth in net worth, administrative efficiency, loan portfolio quality, staff productivity and transaction costs. The study found that the growth of net assets had been on the decline over the years, loan portfolio was poor and default rates were high. According to the indicators evaluated, Tea SACCOs had not yet reached their full potential in outreach and that high transaction costs hindered their financial sustainability.