- Sacco CEOs say mergers can strengthen smaller societies, improve technology investment and boost competitiveness without compromising Co-operative values.
- They emphasise member education as key to better financial planning, responsible borrowing and stronger governance.
- CEOs support firm but fair loan recovery measures to protect members’ savings and maintain financial stability.
For years, debate on Kenya’s Saccos has centred on mergers, but CEOs say the sector’s biggest challenge runs deeper than consolidation alone.
Regulators argue that consolidation could help smaller institutions strengthen their capital base and compete more effectively, while many societies remain cautious about losing their identity and common bond. But conversations with Sacco chief executives suggest the sector’s biggest challenge is broader than consolidation alone.
From keeping pace with digital transformation and protecting members’ savings to strengthening financial literacy and managing loan defaults, leaders say Saccos are navigating a rapidly changing operating environment. Sacco Review spoke to Qwetu Sacco CEO Charles Kaba and Ndege Chai Sacco CEO Gilbert Bett on three issues shaping the future of the Co-operative movement.
Are mergers the answer?
The Ministry of Co-operatives and Micro, Small and Medium Enterprises (MSME) Development has proposed merger and consolidation guidelines aimed at strengthening weaker institutions.
According to the Sacco Societies Regulatory Authority (SASRA), the industry’s asset base continues to grow but remains highly concentrated among a relatively small number of large institutions, leaving many smaller societies struggling to compete with increasingly sophisticated banking and fintech services.
READ:
For Kaba, merging is a practical survival mechanism rather than a sign of failure for institutions feeling market pressures.
“COVID-19 taught us that relying on one sector or one employer is risky. Mergers should not be viewed as a sign of failure but as a business strategy that enables institutions to pool resources, invest in technology and remain competitive.”
Kaba says many smaller Saccos cannot independently afford modern information and communication technology (ICT) infrastructure, cybersecurity systems or digital banking platforms that today’s members expect. However, he cautions that growth should not dilute Co-operative values.
“Co-operatives are not profit-oriented institutions; they exist to serve members. Even as we grow, we must preserve that philosophy.”
Bett believes consolidation offers smaller Saccos an opportunity to strengthen their financial position without abandoning the Co-operative model.
“The capacity of grassroots Saccos with lower financial strength will be enhanced if they merge with other Saccos.”
He says larger institutions are generally better positioned to absorb technological investments, improve governance structures and offer larger loan limits.
Why member education days matter more than ever
While many members associate education days with annual meetings and compliance requirements, Sacco leaders say the sessions are increasingly becoming strategic platforms for improving financial discipline.
According to Kaba, education days have transformed how members manage household finances. “Many members used to wait until January before rushing for emergency school fees loans. Through continuous financial education, more families are planning ahead and saving throughout the year.”
He says education programmes have also expanded beyond savings and loans to include mental wellness, stress management, investment planning and entrepreneurship. “We’re preparing members not just to borrow, but to build wealth responsibly.”
For Bett, informed members make stronger Co-operatives. “When members understand why compliance matters and how loan performance affects dividends, they appreciate that these are not administrative obstacles but measures that protect everyone’s savings.”
READ ALSO:
He says member education strengthens governance because informed members ask better questions and make more informed decisions during annual general meetings.
Is it time for Saccos to take a tougher stance on loan defaults?
As Saccos expand beyond traditional salary-based lending and increasingly serve business owners and informal sector workers, managing credit risk has become more complex.
Kaba says recovering defaulted loans is essential for protecting members’ deposits. “The moment you start playing in the league of big boys, you have to play in that league.”
He says engaging licensed auctioneers where necessary has helped reduce non-performing loans and improve financial stability.
Bett agrees that loan recovery is a fiduciary responsibility but believes it must always be carried out within the law. “Auctioneers can sometimes be rough. Recoveries should remain legal, fair and humane.” He argues that protecting members’ savings should never come at the expense of dignity or due process.
Takeaway
Although mergers continue to dominate policy discussions, the conversations suggest the Co-operative sector’s future will depend on much more than consolidation. Technology, governance, financial literacy and prudent risk management are emerging as equally important pillars for long-term sustainability.
Whether through mergers or independent growth, the common objective remains the same: building stronger institutions capable of protecting members’ savings while meeting the evolving expectations of a new generation of Co-operative members.
By Benedict Aoya
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!
