- Sacco dividends fell or were scrapped in 2026 as Saccos retained more earnings to strengthen capital and liquidity.
- SASRA rules, KUSCCO losses and provisions for non performing loans reduced funds available for dividend payouts.
- Despite lower dividends, the sector grew strongly, with total Sacco assets rising 12.4 per cent to Ksh1.21 trillion.
Kenyan Sacco members received lower or no dividends in 2026 as regulators pushed institutions to build stronger capital reserves and liquidity.
Paul Makunyi, a member of one Savings and Credit Co-operative Society (Sacco), had earned a 20 per cent return on his savings two years earlier. This year, his Sacco announced no dividend at all, citing a difficult operating environment. His experience reflects a wider trend across the sector.
The Sacco Societies Regulatory Authority (SASRA) has tightened prudential rules, requiring deposit taking Saccos to retain more earnings instead of paying them out. The regulator says the approach strengthens institutional capital and helps Saccos remain stable during uncertain economic periods.
Commissioner for Co-operatives David Obonyo has defended the policy, arguing that Saccos should prioritise affordable credit over high dividend payouts. He criticised what he called “creative accounting”, where some Saccos took expensive commercial loans simply to sustain attractive dividends. According to Obonyo, a loan accessed at low interest matters more to members than a large year-end payout.
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Losses linked to the Kenya Union of Savings and Credit Co-operatives (KUSCCO) have also weighed on payouts. Because SASRA allowed Saccos to spread these losses over five years rather than absorb them at once, institutions must set aside part of their annual earnings to cover the shortfall. A Sacco with a Ksh20 million KUSCCO loss, for example, must provide Ksh4 million a year for five years.
In addition, SASRA requires Saccos to provision for non-performing loans, capping the Portfolio at Risk at five per cent. Combined with the KUSCCO provisions and restrictions on borrowing to fund dividends, many Saccos faced multiple financial pressures in the 2025 financial year, reducing the surplus available for distribution.
Cabinet Secretary (CS) for Co-operatives and Micro, Small and Medium Enterprises Wycliffe Oparanya echoed this position, urging Saccos to focus on low interest lending rather than borrowing externally to fund dividends. SASRA CEO David Sandagi said the authority’s mandate is to safeguard members’ deposits and promote a stable Sacco sector.
Certified public accountant Bernard Ngutu, director of Berky Accounting Firm, said lower dividends do not necessarily signal poor performance. He noted that many Saccos are complying with stricter capital requirements, and that early recognition of losses improves transparency and resilience.
Despite reduced payouts, the sector recorded strong growth in 2025. Total assets held by deposit taking Saccos rose 11.5 per cent to Ksh727.1 billion, while credit to the private sector grew 13.4 per cent to Ksh847 billion.
Across the wider sector, assets expanded 12.4 per cent to Ksh1.21 trillion, deposits grew 11 per cent to Ksh831.9 billion, and membership rose 5.7 per cent to 7.8 million.
By Obegi Malack and Mwiti Mukunga
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