Kenya’s SACCO sector is widening access to financial services at an unprecedented pace, but new regulatory data reveals a fragile funding structure increasingly dependent on a narrow pool of wealthy savers, raising fresh concerns over systemic stability.
- •Data from the SACCO Societies Regulatory Authority (SASRA) shows that total deposit accounts rose 9.74% to 16.05 million in 2024, up from 14.52 million a year earlier, even as total deposits rose to KSh 749.43 billion.
- •The majority of the deposit accounts, numbering 14.30 million and representing 89.09% of all deposit accounts, held deposits below KSh 50,000 and cumulatively totalling just 5.86% of the total deposit liabilities in the industry.
- •The real weight of the system lies at the top, as the report reveals that the bulk of the deposit liabilities, over KSh 566.04 billion, or 75.53% of all industry deposits, are held in just about 694,000 accounts, representing a mere 4.32% of total accounts.
This structure creates a dual reality for the movement. On one hand, the sector is delivering on its mandate of broad-based financial inclusion. On the other, its liquidity and lending capacity are heavily reliant on a small fraction of high-value members.
Within the elite group, concentration intensifies further. Accounts holding between KSh 300,000 and KSh 1 million account for KSh 284.79 billion, or 38% of total deposits, while the most exclusive tier of 140,000 accounts with balances above KSh 1 million holds KSh 281.25 billion, representing 37.53% of the industry’s savings.
SASRA has flagged this concentration, particularly the density of small accounts in Large-Tiered SACCOs, as a risk factor requiring heightened supervisory measures. A shift in behavior among these top-tier depositors, whether driven by economic pressures or alternative investment opportunities, could ripple quickly across balance sheets.
“The high concentration of deposit accounts with amounts of less than Kshs 50,000 within the Large-Tiered Regulated SACCOs is another reason why the Authority must continue to deploy appropriate supervisory measures on them due to the risk they pose to the industry and the economy as a whole,” SASRA said in the report.
As the funding base narrows, the deployment of those funds is also undergoing a sectoral shift. While the land and housing sector remains the largest beneficiary of SACCO credit, its dominance is waning. Loans disbursed to land and housing dropped to 25.26% of total advances in 2024, down from 33.24% in 2022. In contrast, the agricultural sector is seeing a steady climb in support, receiving 20.05% of all credit in 2024, up from 13.76% in 2022, a trend largely attributed to favorable weather patterns and state-led subsidy programs.
Meanwhile, education is still the cornerstone of SACCO lending. The sector remained the second-highest beneficiary for the third year running, absorbing KSh 119.49 billion to fund school and college fees. Conversely, credit toward trade, human health, and manufacturing saw marginal declines, indicating a more conservative approach to commercial lending by cooperatives.
