The disease ailing our Saccos is succession problem, not money

Kenya's Saccos are not running out of money.  The Sacco Societies Regulatory Authority's (SASRA)  Supervision Annual Report for 2025 shows deposits grew 11.12 percent to Sh832.74 billion, pushing total assets to Sh1.21 trillion.

What the movement is running out of is heirs. For decades, these cooperatives carried teachers, civil servants, farmers and organised communities through school fees, first plots and family emergencies. The question now is whether the next generation wants any part of it.

On paper, Sacco membership looks healthy. Regulated Saccos closed 2025 with 7.87 million members, up from 7.39 million in 2024, roughly 480,000 new members in a year. Then comes the uncomfortable line. Dormant accounts in deposit-taking Saccos rose 15.75 per cent to 1.69 million. People are joining, then quietly walking away. A register full of sleeping members is not growth, it is a warning.

The classic Sacco assumed a stable job, a predictable payslip, an employer check-off, and a member who would contribute faithfully for 20 years. Even that model is creaking. Sh3.92 billion deducted from members' pay in 2025 never reached their Sacco, affecting over 104,000 members, with county governments and assemblies accounting for nearly half.

Meanwhile, the next generation earns differently. They ride boda bodas, sell on Instagram, run salons and trade in Gikomba. A young entrepreneur might make Sh80,000 in March and Sh25,000 in the next month. Tell her the monthly contribution is fixed and non negotiable and you have lost her before the AGM tea is served.

She saves. She just saves on her phone, in small amounts, whenever cash lands. That should not scare anyone, because small savers already carry this movement. By the end of 2025, about 89 per cent of Sacco deposit accounts held less than Sh50,000.

Digital lenders and mobile apps simply serve that saver better, showing her balance instantly and approving her in minutes with no photocopied ID and no two guarantors. Saccos are no longer measured against the cooperative down the road but against every app on a young graduate's phone.

Reinvention starts with onboarding. A prospective member should be able to register, clear know your client (KYC), contribute and borrow from a phone without a single trip to town. Daily, weekly and goal based savings fit how the informal and gig economy actually earns.

Lending must widen too, because young members want motorcycles, shop stock, laptops and a first home. Credit assessment has to evolve as well. Years of chasing bad debts have taught me that a payslip guarantees nothing. Cash flow does.

A trader with steady mobile money inflows and a clean repayment record can be a better risk than a salaried borrower juggling five digital loans, and properly governed alternative data lets Saccos see the difference.

Saccos don't need to build everything themselves. Fintechs, payment providers and fund managers already have what many cooperatives struggle to create, so rent the capability and keep the member. Putting an outdated product on an app does not modernize it, though. It simply lets members get frustrated faster.

Boards also keep designing youth products in rooms with no young people in them, so put younger members on innovation committees and leadership pipelines. On dormancy, SASRA now wants Saccos to survey members and find the root cause. Don't wait to be told twice. Call them, ask why they left, and make retention a board level indicator alongside deposits, loan growth and portfolio quality.

None of this means abandoning prudence. Liquidity, governance and compliance still matter and Saccos should not try to become banks or digital lenders. Their edge is member ownership combined with responsible credit, and technology should sharpen that edge rather than replace it.

The real test is simple. Are we building institutions our children will choose to inherit, or just managing the ones our parents built? Registration numbers tell us who joined yesterday. Succession depends on who stays tomorrow.

- CPA James Kamau is a CPA and founder of Marathon Debt Recovery Ltd