- Returns on assets fell sharply across the segment in 2025
- Rising expenses are taking a larger share of Sacco income
- Stronger capital and liquidity mask growing pressure on earnings
Returns are falling and costs are rising fast across Kenya’s 178 non-deposit-taking Saccos, new SASRA data shows.
Return on assets for the segment fell to 1.13 percent in 2025, down from 1.74 percent in 2024 and 1.90 percent in 2023, according to the Sacco Societies Regulatory Authority’s (SASRA) Sacco Supervision Annual Report, 2025. Over the same two years, the ratio of total expenses to total income climbed from 78.74 percent to 85.26 percent, meaning NWDT-Saccos are now spending close to 85 cents of every shilling of income just to stay in operation.
Operating expenses alone, measured against total income, rose from 21.78 percent in 2023 to 26.39 percent in 2025.
The deterioration sits inside a report that otherwise describes the NWDT-Sacco segment in upbeat terms. SASRA’s own summary, the aggregate CAEL (Capital Adequacy, Asset Quality, Earnings and Liquidity) rating for the 178 NWDT-Saccos, states that the segment recorded improvements across the key CAEL rating indicators in 2025.
Capital adequacy did strengthen. Core capital rose to Ksh18.79 billion from Ksh14.28 billion, lifting the core capital to total assets ratio to 13.29 percent and core capital to total deposits to 17.69 percent, both comfortably above the regulatory minimums of 8 percent and 5 percent. Asset quality improved too, with the non performing loan ratio falling to 6.44 percent from 7.07 percent.
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A total of 132 NWDT-Saccos recorded positive growth in total income in 2025, down from 141 the year before, while the number posting negative growth rose to 46, up from 37. The cumulative increase in total income across the segment slowed to Ksh1.37 billion, down from Ksh1.71 billion in 2024, a trend SASRA itself describes as pointing to a slower income generation among the NWDT-SACCOs that could suggest reduced business and/or investment activities within this segment.
Total financial investments measured against core capital jumped to 107.30 percent in 2025, from 75.48 percent in 2024, blowing past the prescribed maximum of 40 percent, a signal that NWDT-Saccos are parking a growing share of their capital in investments rather than deploying it into member lending.
The ratio of retained earnings and disclosed reserves to core capital fell to 59.45 percent, from 66.89 percent in 2024, dropping below the prescribed minimum of 50 percent less comfortably than before, even though it remains technically compliant. SASRA attributes this specific decline to core capital growing faster, at 31.61 percent, than retained earnings and reserves, which grew only 16.96 percent over the same period.
Liquid assets against short term liabilities stood at 157.26 percent in 2025, well above the prescribed minimum of 10 percent, while external borrowing against total assets fell to 1.29 percent, from 1.46 percent, underscoring that NWDT-Saccos continue to rely on internally generated funds rather than outside credit.
By Benedict Aoya
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