SACCO Societies Regulatory Authority (SASRA) recently released a report revealing critical shifts in financing priorities. In the first quarter of 2026 alone, regulated saccos disbursed Sh2.79 billion in medical loans, a staggering 31 per cent increase from the Sh2.13 billion disbursed in the same period in 2025.
In context, the very institutions founded to assist members exert control over their economic livelihoods have medical lending as a fast-growing loan category, signaling a troubling shift in the cooperative movement role.
Medical emergencies until recently were met through harambees, but with economic pressures intensifying, those safety nets have weakened, forcing many to turn to saccos.
Admittedly, Sacco loans provide immediate relief, but they also divert resources away from the very reasons we join the cooperative movement, all while discouraging savings as households are compelled to exhaust their limited resources on immediate medical needs, resources that should have otherwise been used to build assets and financial resilience.
The issue is less about the absence of solutions and more about ensuring that existing ones deliver the intended impact. Private insurers have priced themselves out of reach of the masses. They cover less than 10 per cent of the population nationally, and in most regions, penetration is below 2 per cent.
The Social Health Authority, launched in October 2024, was a welcome and necessary reform. The NHIF it replaced had become weighed down by governance failures, opaque claims processing, and eroding public trust. Replacing it with a modern, transparent system was the right instinct, but being relatively new, it is yet to achieve the operational maturity that was envisioned. This leaves 83.3 per cent who work in the informal sector, with no employer-sponsored insurance, no steady income, and no safety net when illness strikes.
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Certainly, the surge in the cooperatives’ medical loans is a distress signal that our healthcare financing architecture has left families financially vulnerable, and the only thing standing between millions of these families and financial ruin is the cooperative movement that was never built for this burden.
As a country, we cannot build wealth while illness keeps forcing families into debt. Every shilling borrowed to pay a hospital bill is a shilling that will never finance a home, educate a child, or grow a business. Every member who exhausts the loan granted to meet medical expenses loses an opportunity to invest in their future. Multiplied across millions of households, those losses slow the country's economic growth. With more than 14 million members and billions of shillings in deposits, our Sacco sector possesses the scale to secure more affordable group health insurance for its members.
Rather than continuing to finance medical expenses through loans, policymakers should enable SACCOs to leverage their collective bargaining power to facilitate access to comprehensive group health cover through affordable monthly contributions. Unlocking this potential, however, will require deliberate regulatory harmonization between SASRA and the Insurance Regulatory Authority (IRA). Equally important is embracing digital micro-health savings. While an annual premium of Shs10,000 may be unaffordable for many households; thousands of families could realistically save Shs 50 to Shs100 per week if given convenient digital channels. Leveraging existing infrastructure like M-Pesa, SACCO digital platforms, and mobile financial services, would allow members to make small, frequent contributions into dedicated health wallets or pooled insurance funds.
Over time, these micro-contributions would build meaningful protection against catastrophic medical expenses while reducing dependence on emergency borrowing.
We must also rethink healthcare protection beyond retirement. Though some individuals, particularly those in the formal-sector enjoy employer-sponsored medical cover during their careers, that protection often ends at retirement, precisely when healthcare needs tend to rise. Employees should therefore be encouraged to secure post-retirement medical cover early in their working lives, allowing them to build protection over time and avoid the significantly higher premiums that often accompany enrolment at an older age.
The path forward also requires Saccos to step into the role of financial educators. By integrating health into financial literacy programs, institutions can demonstrate that preventive care through regular screening is actually wealth preservation. Early diagnosis can mean the difference between affordable treatment and a medical loan. Unless healthcare financing becomes more affordable, accessible, and sustainable, medical expenses will continue to consume the savings, investments, and opportunities that generations have worked so hard to build.
Communications specialist at a financial institution