The Cooperatives and MSMEs Cabinet Secretary Wycliffe Oparanya and Saccos Societies Regulatory Authority, SASRA have raised concern over growing exploitation of Kenya’s sacco sector by influential individuals securing massive unsecured loans by bypassing lending thresholds.
CS Wycliffe Oparanya warned that prominent figures are infiltrating saccos with minimal savings yet leveraging their status to pressure officials into granting excessive credit. He cited the collapse of Metropolitan Sacco, which has Ksh50 billion in untraceable loan assets and a Ksh12 billion negative equity, as a cautionary tale.
Sasra acting CEO David Sandagi confirmed rising cases of Saccos violating collateral and risk limits, contributing to a record Ksh100.76 billion loan-deposit gap in 2024.
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While the sacco model allows members to borrow up to three times their deposits, the widening mismatch—up from Ksh76.38 billion in 2023—is unsustainable without stronger deposit mobilisation. Dormancy is also rising, with inactive sacco members growing 15% to 1.66 million, especially within non-withdrawable deposit-taking (NWDT) saccos.
Sasra’s report urges sacco leaders to enforce lending caps, align products to member needs, and avoid short-term political or social favours. The future stability of Kenya’s trillion-shilling sacco sector, which supports millions, now hinges on strict internal governance and regulatory compliance as influential individuals part with big loans leaving most of the saccos on the verge of collapse.
By Juma Ndigo
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