Kenya’s Savings and Credit Cooperative (SACCO) sector continues to demonstrate resilience, steady growth, and increasing relevance to the national economy, according to the latest 2025 sector updates released by the Sacco Societies Regulatory Authority (SASRA). The update paints a picture of a sector that is expanding its membership base, deepening credit access, and strengthening financial stability, even as it grapples with loan quality and dormancy challenges in some segments.
As of December 2024, regulated SACCOs served 7.39 million members, representing about 13.11 per cent of Kenya’s estimated population of 56.43 million. This confirms the sector’s role as one of the country’s most inclusive financial systems, particularly for salaried workers, small businesses, and households often underserved by mainstream banks.
The Deposit-Taking SACCOs (DTS) category continues to dominate the sector, accounting for 93.03 per cent of total membership. SASRA reports that membership under DTS SACCOs has grown steadily, posting a cumulative annual growth rate of 5.71 per cent over the last five years. Even more encouraging is the rise in active membership, which has expanded at a faster cumulative annual growth rate of 7.85 per cent over the same period, signalling increased engagement by members in SACCO products and services.
In contrast, the Non-Deposit-Taking SACCOs (NDTS) category continues to face elevated dormancy levels. Over the last four years, dormancy in NDTS SACCOs has averaged about 30 per cent, significantly higher than the 7 per cent recorded among DTS SACCOs. This trend highlights the need for NDTS institutions to re-engage members through product innovation, digital services, and stronger governance.
On the financial front, credit remains the backbone of the SACCO movement. The facilitation of loans and other credit products recorded the highest cumulative annual growth rate at 8.77 per cent over the last five years, closing at KSh 0.93 trillion. In gross terms, loans now constitute 79.06 per cent of total assets, underscoring SACCOs’ central role in household and enterprise financing.
Notably, loans are fully funded by existing deposit liabilities, with a funding ratio of 112.59 per cent in 2025, up from 107.89 per cent in 2020. This indicates that SACCOs are increasingly relying on member deposits rather than external borrowing to meet credit demand, a development that strengthens sustainability and reduces exposure to external shocks.
The sector’s growing macroeconomic importance is also evident. Total SACCO assets stood at KSh 1.246 trillion in 2024, making the sector second only to the pension industry and larger than microfinance banks. SACCO assets now account for 6.63 per cent of Kenya’s Gross Domestic Product, up from 5.59 per cent in 2014, reflecting a decade of steady expansion.
Loan quality, however, remains an area of close monitoring. As at September 2025, the overall non-performing loans (NPL) ratio stood at 8.45 per cent, slightly improved from 8.54 per cent reported in December 2024. While this marginal improvement suggests stabilization, SACCOs under the Non-Withdrawable Deposit-Taking (NWDT) category have experienced rising NPLs, increasing from 7.12 per cent in 2023 to 8.45 per cent in September 2025. SASRA attributes this partly to improved compliance with loan provisioning requirements, as SACCOs take a more realistic view of credit risk.
Loans classified under the loss category grew by KSh 12.74 billion, reflecting intensified efforts by regulated SACCOs to recognize problem loans and strengthen collections frameworks.
From a stability perspective, the DTS subsector remains broadly sound. General compliance with institutional capital adequacy requirements shows a buffer of 2.79 per cent, providing room to absorb business losses. Members’ share contributions averaged 5.74 per cent of total assets, well above the prescribed minimum of 2 per cent, indicating strong member ownership. Cost efficiency also remains healthy, with the cost-to-income ratio averaging 43 per cent, although SASRA notes this figure may rise as SACCOs fully account for costs such as interest on deposits, depreciation, and loan provisions.
Liquidity levels in DTS SACCOs are robust, with compliance at 69.56 per cent, comfortably above the minimum, while the stressed liquidity ratio stands at 17.39 per cent against total deposit liabilities.
In the NWDTS subsector, SASRA reports sustained growth in core capital, driven largely by retained earnings. Liquidity levels average 16 per cent, well above the prescribed minimum of 10 per cent. Dependence on external borrowings continues to decline and now stands at just 1.39 per cent of assets, while deposits mobilization closely matches lending at 101.29 per cent. Non-earning assets have reduced to 11.78 per cent, edging closer to the regulatory target of 10 per cent.
Overall, the 2025 SASRA update portrays a SACCO sector that is growing in scale, deepening its economic footprint, and steadily strengthening its financial foundations—while also highlighting areas where continued reforms and vigilance are needed to safeguard members’ savings and sustain public confidence.
