Data from the SACCO Societies Regulatory Authority (SASRA) shows that SACCOs channelled most of their lending toward land purchases, school fees and agriculture in the three months to September 2025, making the three sectors the biggest beneficiaries of credit demand among members. This accounted for more than 65 per cent of all loans issued by regulated SACCOs during the third quarter.
The report by the regulator indicates that overall lending rose sharply to KSh131.84 billion, up from KSh113.79 billion in June, signalling improved liquidity and sustained appetite for credit across cooperative societies.
Land and housing remained the most sought‑after loan products, with disbursements climbing to KSh32.70 billion from KSh29.10 billion in the previous quarter. Despite a sluggish property market, members continued to prioritise home ownership and land acquisition, with KSh17.37 billion channelled to land purchases and KSh15.33 billion to housing loans.
Elsewhere, school fees recorded one of the strongest lending in the period, emerging as the second‑largest loan category. Disbursements surged to KSh31.71 billion, its highest level in a year, up from KSh21.99 billion in June. SASRA attributes the spike to fee payment cycles in universities, colleges and private schools, where families frequently rely on SACCOs for emergency and top‑up loans. The education sector accounted for 24.05 per cent of all credit issued, nearly matching the 24.80 per cent share held by land and housing.
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On the other hand, agriculture, a key pillar for rural‑based SACCOs, ranked third with KSh21.94 billion in loans, slightly higher than the KSh20.90 billion recorded in the previous quarter. Although its proportional contribution dipped to 16.64 per cent, SACCOs remained a crucial source of financing for farmers seeking capital for livestock, crop production, inputs and agribusiness ventures.
It’s worth noting that borrowing for animal production more than doubled to kSh9.99 billion, reflecting increased investment in dairy, poultry and livestock enterprises. Crop farming loans, however, declined to kSh9.73 billion, a trend linked to unpredictable weather patterns and rising input costs.
Beyond the dominant sectors, consumption and financial services also remained active, as wholesale and retail businesses pushed trade‑related borrowing to KSh16.79 billion, while consumption loans eased slightly to KSh12.52 billion. Financial and investment‑linked credit rose to KSh7.94 billion, recovering from KSh5.87 billion in June.
The data paints a picture of resilience within the SACCO industry despite pressures in the wider financial sector.
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However, SASRA flagged concerns over rising loan quality risks. Non‑performing loans among deposit‑taking SACCOs, which stood at a whopping 7.17 per cent, are above the recommended 5 per cent threshold. Despite this, the sector maintained a healthy liquidity ratio of 69.56 per cent, well above the minimum requirement, enabling SACCOs to continue meeting member borrowing needs.
According to SASRA, the lending patterns reflect the financial pressures facing households, with many Kenyans turning to SACCOs to fund education, secure land, and sustain agricultural activities. The regulator expects lending to remain strong in the year ahead, driven by the January school fees cycle and renewed demand for agribusiness financing ahead of the planting season. SACCOs have been urged to tighten risk management frameworks to protect member deposits amid ongoing economic uncertainties.
By Masaki Enock
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