- Treasury plans to redirect Sacco deductions straight to societies
- Unremitted payroll deductions rise as more members are affected
- Most outstanding deductions are linked to Sacco loan repayments
Kenya is moving to take billions of shillings in workers’ Sacco deductions out of the hands of employers. The payroll overhaul is designed to stop a growing crisis, in which money deducted from salaries fails to reach the institutions to which it belongs.
The proposed Treasury system will centralise payroll processing for government agencies and county governments. Once implemented, it will send Sacco savings and loan deductions directly to the respective Saccos rather than passing the money through employers.
Co-operatives and Micro, Small and Medium Enterprises (MSMEs) Cabinet Secretary Wycliffe Oparanya says the system is being worked on. He says it is intended to end the persistent problem of nonremittance.
The urgency is illustrated by the latest Sacco supervision figures.
Employers failed to remit Ksh 3.92 billion deducted from workers’ salaries to regulated Saccos during 2025. The amount increased from Ksh 3.49 billion in 2024. Meanwhile, the number of affected Sacco members almost doubled from 55,602 to 104,331.
The number of regulated Saccos affected also increased from 85 to 89.
County governments and county assemblies accounted for the largest share of the outstanding deductions at Ksh 1.884 billion, affecting 52,746 Sacco members.
Public universities and tertiary colleges followed with Ksh 725.91 million, affecting 6,928 members.
State corporations accounted for Ksh 480.55 million, affecting 7,668 members, while private companies had Ksh 345.27 million in unremitted deductions. National government ministries accounted for Ksh 157.99 million.
Overall, the figures show that the problem cuts across both levels of government and the wider public and private sectors.
READ:
Of the Ksh 3.92 billion outstanding in 2025, Ksh 3.04 billion, or 77.55 per cent, represented deductions for loans and other credit facilities. Another Ksh 879.7 million represented savings deductions.
This creates a particularly serious problem for workers who have already had their salaries reduced to service Sacco loans. On paper, the instalment has been deducted.
However, if the employer does not transfer the money to the Sacco, the society may not receive the repayment when expected.
The Sacco Societies Regulatory Authority (SASRA) says such delays can leave loans in default or substantially impaired. This puts pressure on Sacco liquidity and their ability to issue credit to members.
The proposed architecture would fundamentally alter the traditional check off system.
Under the current arrangement, an employer deducts the employee’s authorised Sacco contribution or loan repayment. It then remits the money to the relevant Sacco.
Under the proposed model, the employer would receive only the amount due to the employee, while the Sacco deduction would flow directly to the Sacco. In effect, the employer would no longer act as the financial intermediary for that portion of an employee’s salary.
SASRA chief executive David Sandagi said the approach would remove employers as intermediaries and address public sector related non-remittances.
By Hillary Muhalya
Get more stories from our website: Sacco Review.
For comments and clarifications, write to: Saccoreview@
Kindly follow us via our social media pages on Facebook: Sacco Review Newspaper for timely updates
Stay ahead of the pack! Grab the latest Sacco Review newspaper!
