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| Saccos savings to support development projects in Kenya |
SACCOs Poised to Power Kenya’s Economic Development Amid Trillion-Shilling Debate
As Kenya grapples with ambitious infrastructure goals and fiscal pressures, the country’s Savings and Credit Cooperative Organisations (SACCOs) have emerged as a critical pillar of the economy, holding over KSh 1 trillion in assets and sparking intense national debate.
The regulated SACCO sector has demonstrated remarkable resilience. By late 2025, total assets in the regulated segment surpassed KSh 1.156 trillion, marking a significant milestone from KSh 392.8 billion in 2016. This growth reflects strong member confidence, rising deposits, and expanding loan portfolios that support millions of Kenyans, particularly in agriculture, small businesses, and housing.
The government now eyes this substantial pool of savings to finance major development projects. Officials are advancing plans through the proposed National Infrastructure Fund and a new Cooperatives Bill.
The strategy encourages SACCOs to invest in government-backed infrastructure bonds or structured funds, similar to how pension schemes allocate resources to Treasury instruments. Proponents argue this move could unlock capital for roads, railways, affordable housing, and agricultural value chains without coercive measures. However, the proposal has triggered anxiety among members.
Over the weekend, viral claims of potential government “seizure” of deposits prompted a surge in withdrawal requests via mobile apps. Authorities, including Deputy President Kithure Kindiki, have moved quickly to reassure the public. They emphasize that participation would be voluntary, with SACCOs earning competitive returns through interest and dividends. Regulators report that any panic withdrawals have not escalated into a systemic run.
Businessman and political commentator Jimi Wanjigi cautioned that targeting SACCO funds amid economic challenges could erode trust. He noted that cooperatives already play a vital role in funding grassroots enterprises and could do more if properly supported. SACCOs have long been engines of financial inclusion in Kenya. They provide accessible credit at competitive rates, often outperforming commercial banks for middle- and low-income earners.
Leading societies such as Tower SACCO, Ports SACCO, and others recently announced strong dividends (up to 20-21%) and interest on deposits (around 12-15%) for the year, boosting member loyalty despite broader economic headwinds like inflation. The sector also benefits from institutional strengthening.
SACCO Central, a secondary cooperative, is developing a Central Liquidity Facility (CLF) in collaboration with the Central Bank of Kenya (CBK) and SASRA. This aims to enhance stability, enable shared technology platforms, and improve liquidity management across societies. Economists view SACCOs as a bridge between formal finance and the informal economy, which employs the majority of Kenyans.
With national savings rates remaining relatively low, mobilizing these funds responsibly could accelerate GDP growth while deepening financial inclusion.Yet challenges persist: rising non-performing loans in some societies, the need for stronger governance, and member education on investment risks.
As Parliament considers the Cooperatives Bill, stakeholders call for transparent f
rameworks that protect savers while aligning SACCO capital with national development priorities.The coming weeks will prove decisive. Whether SACCOs become reluctant financiers or willing partners could shape Kenya’s economic trajectory for years. For now, the sector’s trillion-shilling war chest positions it as an indispensable player in the country’s quest for sustainable growth.