- 247 Saccos cut or skipped dividends after regulators directed them to retain earnings and strengthen capital reserves.
- The move aims to improve liquidity, protect members’ savings and support affordable lending despite strong sector growth.
- Regulated Saccos grew assets to Ksh727.1 billion, while the wider sector’s assets surpassed Ksh1.2 trillion in 2025.
Kenya’s Savings and Credit Co-operative Organisations (SACCOs) have collectively grown their assets, deposits and loan books over the past year, yet a large number of them have quietly cut or scrapped dividend payouts altogether. The reason is not poor performance but a deliberate regulatory squeeze designed to protect the sector’s long term stability.
The Sacco Societies Regulatory Authority (SASRA) and the State Department for Co-operatives have directed 247 Saccos to lower their dividend payouts and instead set aside earnings to guard against potential losses.
Regulatory filings show the Capital Adequacy Ratio for Deposit Taking (DT) Saccos rose to 17.8 per cent in June 2025, up from 17.6 per cent a year earlier, evidence of just how firmly the regulator is enforcing higher capital reserves.
For ordinary members, the effect has been personal. Paul Makunyi, a driver in Meru, attended his Sacco’s virtual Annual General Meeting (AGM) in March expecting good news. Two years earlier he had received a Ksh40,000 dividend, a 20 per cent return on his KSh200,000 savings, which helped him settle a large portion of his children’s school fees. This year, members were told there would be no payout at all, citing a tough operating environment.
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Retaining cash allows a Sacco to maintain enough liquidity to honour member withdrawals and to fund cheaper, more reliable loans. It is this trade off, between rewarding savers now and protecting the institution’s ability to lend affordably in future, that lies behind the wave of reduced dividends.
The government has backed this shift. Cabinet Secretary (CS) for Co-operatives and Micro, Small and Medium Enterprises (MSMEs) Wycliffe Oparanya said Saccos should focus on advancing affordable loans rather than chasing high dividend payouts.
“Some Saccos even ask the commissioner of cooperatives for a licence to procure external loans in order to fund dividend payouts. That must never happen. What we want is for Saccos to concentrate on advancing low interest loans. Dividends must not take precedence over low interest rates,” said Oparanya.
Despite the tighter rules, the wider movement continues to expand. Government data shows total assets of DT Saccos grew by 11.5 per cent to Ksh727.1 billion by December 2025, up from Ksh651.8 billion a year earlier.
Credit advanced by DT Saccos to the private sector rose by 13.4 per cent to Ksh847.0 billion, while lending to government increased by 12.8 per cent to Ksh18.3 billion. Net credit advanced to financial corporations rose from KSh14.7 billion to KSh15.3 billion over the same period.
Across the wider Sacco sector, total assets grew by 12.4 per cent to Ksh1, 209.6 billion. Loans and advances rose by 12.2 per cent to Ksh948.3 billion, while deposits grew by 11.0 per cent to Ksh831.9 billion in 2025.
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Capital reserves increased from Ksh197.5 billion in 2024 to Ksh251.8 billion in 2025. Income from loans grew by 13.6 per cent and income from investments rose by 4.2 per cent over the review period.
Membership of regulated Saccos grew by 5.7 per cent to 7,806,300 members. The number of Saccos regulated by SASRA rose by two to 357, while the number of branches increased from 652 in 2024 to 669 in 2025.
By Mwiti Mukunga
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