Kenya’s SACCO sector closed 2024 with KSh 845.11 billion in gross loans, up from KSh 758.57 billion a year earlier, while the industry’s non-performing loan (NPL) ratio held at 8.39%, according to supervisory data from the SACCO Societies Regulatory Authority (SASRA).
- •The improvement comes as provisions for bad loans rose to KSh 55.69 billion from KSh 52.35 billion, suggesting that the 11.41% credit growth is outpacing risk provisioning.
- •The data places SACCOs in a different risk position from Kenya’s banking sector, which ended FY25 with an estimated NPL ratio that is more than double the SACCO average, at 15.5% — according to the FY25 Kenya Banking Sector Report by Wall Street Africa Group.
- •However, within the cooperative sector, agriculture-based SACCOs recorded the highest NPL ratio at 18.69%, while private-sector DT-SACCOs posted a comparatively lower 5.73%, and government-linked SACCOs averaged 10.13%.
The data also shows that 86.71% of all SACCO loans, or KSh 732.84 billion, were classified as performing in 2024, up slightly from 86.52% in 2023, while watch-category loans (between 1 -30 days past due) declined to 4.90% from 5.22%, indicating improved early-stage loan recovery even as substandard and doubtful loans edged higher.
Among non-deposit-taking SACCOs, community-based institutions recorded an NPL ratio of 13.29%, compared with 4.75% for government-linked entities, and just 0.19% for public university SACCOs, highlighting extreme dispersion in credit quality within the same regulatory framework.
At institutional level, 68 DT-SACCOs reported NPL ratios below 5%, while 109 institutions remained above that threshold including 68 with ratios exceeding 10% thus revealing persistent pockets of high-risk lending despite overall sector stability.
However, regulated SACCOs are mainly operating as payroll-linked lenders rather than purely member-driven credit institutions, a structure that has left their cash flows closely tied to the reliability of employer remittances, particularly from the public sector. In 2024, unremitted payroll deductions rose to KSh 3.49 billion, up from KSh 2.59 billion a year earlier, affecting 85 institutions and 55,602 members, with 74.5% of the funds intended for loan repayment.
County governments and assemblies accounted for KSh 1.61 billion (46.07%) of the arrears, followed by public universities and colleges at KSh 762.27 million (21.85%), highlighting how delays in public-sector payments quickly transmit into liquidity pressure across cooperative lenders even where underlying borrowers remain salaried.
The SACCO asset base, which rose to KSh 1.076 trillion in 2024, also remains heavily credit-dependent, with loans accounting for 73% of total SACCO assets, while investment in property, equipment, and other assets rose modestly to KSh 53.57 billion, including a shift toward investment property holdings of KSh 14.81 billion and a reduction in opaque “other assets” to KSh 7.84 billion.
