How to Build a SACCO Land Collateral Revaluation Calendar

Regulation 43 of the SACCO Societies Regulations 2010 requires that all land collateral be revalued by an independent registered valuer every three years. This is not a guideline — it is a regulatory requirement. SASRA examinations specifically check compliance.

Most SACCOs do not have a formal system to track revaluation cycles. Valuations are done once at origination and then forgotten. Three years pass. The loan is still active, but the collateral documentation is now non-compliant.

Here is how to build a system that keeps you compliant.

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Step 1: Build Your Collateral Register

The starting point is a complete collateral register. For every land-secured loan, record:

Loan account number. Member name. LR or CR number of the collateral. County. Date of the most recent independent registered valuation. Valuation amount. Outstanding loan balance. Current LTV ratio (loan balance / valuation amount).

If you do not have this information consolidated in one place, the first task is to gather it from individual loan files.

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Step 2: Calculate the Revaluation Due Date

For each loan in the register, add 36 months (three years) to the valuation date.

If the valuation was done on 15 March 2022, the revaluation is due by 15 March 2025. If today is after that date, the loan is already out of compliance.

Mark each loan as:

Current (revaluation due more than 6 months from now). Upcoming (revaluation due within 6 months). Due now (revaluation due within 1 month). Overdue (revaluation date has passed).

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Step 3: Prioritise by Risk

Within the overdue and due-now categories, prioritise:

Highest outstanding balance (largest financial exposure). Highest LTV ratio (closest to enforcement threshold). Agriculture-based SACCO loans (highest sector NPL rate — 18.69%). Any loans where the borrower has missed payments.

For SACCOs with limited resources, addressing the top 20 highest-risk positions first is more efficient than trying to update the entire portfolio simultaneously.

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Step 4: Commission Fresh Valuations

Engage ISK-registered valuers to conduct fresh valuations on the positions identified in Step 3. The valuer must:

Be independent of both the SACCO and the member. Be registered under the Valuers Act (confirm registration number with ISK). Conduct a physical site visit. Produce a formal valuation report.

Update the collateral register with the new valuation date and amount.

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Step 5: Update LTV Ratios

With fresh valuations, recalculate the LTV ratio for each updated position.

Any position where the new LTV exceeds your credit policy maximum (typically 70%) requires:

A review of the loan's risk classification. Consideration of whether to request additional security from the member. Potentially, increasing the provision against the loan.

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Step 6: Build Automated Reminders

Add calendar reminders for each loan's next revaluation due date. Set reminders:

At 9 months before due date (alert for upcoming revaluation). At 6 months before due date (initiate process). At 3 months before due date (valuation must be completed).

For SACCOs with loan management software, this can be automated. For those without, a shared spreadsheet with conditional formatting works.

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Step 7: Report to Credit Committee

The credit committee should receive a quarterly collateral calendar report showing:

Number of loans with current valuations. Number with valuations due in the next 6 months. Number overdue. Actions being taken.

This keeps the committee informed and creates documented evidence of active compliance management.

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Litmus CVP for existing portfolio review: KSh 3,000 per parcel. 90-day proof package: 10 parcels for KSh 30,000.

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This article is for general information only. It does not constitute legal advice. For SACCO regulatory compliance, consult a Kenya advocate with SACCO regulatory experience.