
Kenya’s Deposit-Taking Savings and Credit Cooperative Organizations (DT-SACCOs) expanded their loan portfolio to dwarf commercial banks in the private sector and the National Government lending, according to the Kenya National Bureau of Statistics (KNBS).
Credit advanced by DT-SACCOs rose by 13.4 percent to Ksh.747 billion to the private sector, while lending to the National Government surged by 14.1 percent to Ksh.16.2 billion as of December 2024.
This growth comes amid a national push to deepen financial inclusion, with SACCOs playing a vital role in empowering individuals, Small and Micro Enterprises (SMEs), and entrepreneurs by offering accessible and affordable credit.
Their expansion has been bolstered by innovations in digital platforms, enabling members to save, borrow, and invest more efficiently.
This even as the regulatory body, the SACCO Societies Regulatory Authority (SASRA) is pushing for the mandatory implementation of a Credit Information Sharing (CIS) mechanism across SACCOs to enhance credit risk management and reduce the rising burden of non-performing loans (NPLs), which currently stand at 8 percent.
According to SASRA CEO Peter Njuguna, there’s the need for legislative action to enforce full-file credit data sharing, saying such a move would help bridge critical information gaps.
Also Read: SASRA Step Up Push for Mandatory CIS Mechanism Among SACCOs
“Full-file sharing will enhance SACCOs’ ability to make better-informed lending decisions, improve borrower profiles, and foster a culture of responsible borrowing,” said Njuguna, at the Sacco Leadership Forum hosted by Metropol CRB.
The sector’s adoption of digital services also accelerated, with SACCOs now leveraging mobile and online platforms to enhance service delivery, streamline operations, and expand their reach.
In response to the diverse financial needs of their growing membership base, SACCOs are rolling out customized products to support everything from education and agribusiness to housing and health.
Commercial Banks and Microfinance Banks Performance
Commercial banks reported mixed performance in credit disbursement, with credit extended to the National Government having shot up by 13.9 percent, from Ksh.1,720.3 billion in December 2023 to Ksh.1,960.1 billion by December 2024.
However, lending to the private sector contracted by 1.1 percent, falling to Ksh.4,032.0 billion during the same period.
Microfinance banks also posted a decline in lending activity, where total domestic credit issued in period under review dropping by 13.6 percent to Ksh.42.7 billion.
Specifically, credit to the private sector shrank by 15.8 percent, while lending to the National Government edged up by 2.4 percent to Ksh.4.5 billion.
The Central Bank of Kenya lowered the Central Bank Rate (CBR) to 11.25 percent in December 2024, down from 12.50 percent in the previous year. Despite this easing, commercial bank interest rates rose during the review period, averaging 16.89 percent.
