State tightens grip on saccos as sector's asset base hits Sh1 trillion

Co-operatives CS Wycliffe Oparanya (right), Principal Secretary Patrick Kilemi and Sasra acting CEO David Sandagi (left), during the launch of the Sacco Supervision Annual Report, 2024, in Nairobi, on September 25, 2025. [Wilbrforce Okwiri, Standard] Small-sized Saccos with deposits of below Sh100 million will be required to merge with larger ones as the government tightens its grip on the sector whose weakness in governance structures has been a challenge in recent times. Cooperatives and MSMEs Cabinet Secretary Wycliffe Oparanya says the impact of these Saccos, which largely offer back-office services only, is not significant in the push for financial inclusion. The directives by the CS issued on Thursday also extended to transport saccos, which he said would be known as transport cooperatives (transcoops) unless one is engaging in financial intermediary business. This is in addition to the directive that saccos will only seek external funding with authorisation from the regulator. The CS made the pronouncements during the launch of The Sacco Supervision Annual Report, 2024, a statutory annual publication of The Sacco Societies Regulatory Authority (Sasra). The report shows the sector's asset base hit Sh1.076 trillion as at December 2024. Latest numbers, as at August 2025, show this amount has gone up to Sh1.14 trillion. The report shows there are 355 registered saccos, a drop from 357 in 2023 and 359 in 2022. Membership grew by 7.94 per cent to reach 7.4 million, when compared to 2023. Of the 355, 177 are deposit taking saccos (DT-Saccos) and 178 are non-withdrawable deposit taking saccos (NWDT-saccos). While the number of NWDT-saccos dropped from 183 in 2022 and 2023 to 178 last year, DT-Saccos now stand at 177 from 174 in 2023 and 176 in 2022. Oparanya noted that among the 355 regulated saccos, 216 of them have relatively small balance sheets of less than Sh1 billion in assets totalling to Sh79.7 billion. This, he said, is only 7.40 per cent of total assets. "Such small balance sheets undermine their competitiveness in the credit business, which today heavily runs on very robust ICT and technological platforms - but which these saccos can hardly afford," said the CS. He said while the report is based on the 355 regulated entities, there are many other BOSA only saccos whose deposits are below the Sh100 million threshold which are not under the supervision of Sasra. The CS argued that such thin balance sheets limit the saccos' ability to generate the required resources and revenues. "A time has come for the sacco sector to explore market driven solutions of consolidations and mergers of these very many small BOSA-only saccos. This is the only way to ensure their financial viability and stability," he said. "To this end, I'm happy to report that under SASRA's guidance, one such small-sized regulated sacco in Kirinyaga County recently merged with a larger, more stable and dominant regulated sacco." Sasra Acting Chief Executive David Sandagi, said the law provides for voluntary mergers. "The policy position we are now engaging with is to persuade involuntary mergers," he said. "What we are seeing is that there has been an uptake of that (albeit) slow, but it is pointing to mergers and acquisitions that we will be seeing in future," he said. He said in addition to the plan for mergers, Sasra is also pushing for shared services among saccos to mitigate exposure of their limited capital. Here is where the central liquidity fund as proposed by the ministry is also expected to play role as saccos can borrow from each other reducing dependence on external funding. "No sacco shall be allowed to borrow from external sources to pay dividends, and henceforth, any sacco intending to procure an external loan must obtain written approval from the Commissioner (for cooperatives), subject to compliance with prescribed ratios," directed CS Oparanya during the launch of the report.

State tightens grip on saccos as sector's asset base hits Sh1 trillion

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State tightens grip on saccos as sector's asset base hits Sh1 trillion

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