According to data from the Sacco Societies Regulatory Authority (SASRA), the SACCO industry closed 2024 with gross loans valued at KSh 845.11 billion, marking an 11.41 per cent increase from KSh 758.57 billion a year earlier. Despite the rapid credit expansion, the sector’s non‑performing loan (NPL) ratio remained steady at 8.39 per cent, according to the SACCO supervision annual report, 2024.
The report shows that provisions for bad loans rose modestly to KSh 55.69 billion from KSh 52.35 billion, suggesting that credit growth is outpacing risk provisioning.
By comparison, Kenya’s banking sector ended FY25 with an estimated NPL ratio of 15.5 per cent, which was nearly double the SACCO average according to the Kenya Banking Sector Report by Wall Street Africa Group.
Within the cooperative sector, however, disparities remain stark. Agriculture‑based SACCOs recorded the highest NPL ratio at 18.69 per cent, while private‑sector deposit‑taking SACCOs posted a comparatively lower 5.73 per cent. Government‑linked SACCOs averaged 10.13 per cent. Among non‑deposit‑taking SACCOs, community‑based institutions reported an NPL ratio of 13.29 per cent, compared with 4.75 per cent for government‑linked entities and just 0.19 percent for public university SACCOs.
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Overall, 86.71 per cent of SACCO loans, equivalent to KSh 732.84 billion, were classified as performing in 2024, up slightly from 86.52 per cent in 2023. Watch‑category loans (between 1–30 days past due) declined to 4.90 per cent from 5.22 per cent, indicating improved early‑stage recovery. However, substandard and doubtful loans edged higher, underscoring persistent credit risks.
Institutional data revealed that 68 deposit‑taking SACCOs reported NPL ratios below 5 per cent, while 109 institutions remained above that threshold, including 68 with ratios exceeding 10 per cent. Analysts say this points to pockets of high‑risk lending despite overall sector stability.
SASRA also highlighted structural vulnerabilities tied to payroll‑linked lending. In 2024, unremitted payroll deductions rose to KSh 3.49 billion from KSh 2.59 billion in 2023, affecting 85 institutions and 55,602 members. Of this, 74.5 per cent represented funds intended for loan repayment. County governments and assemblies accounted for KSh 1.61 billion (46.07 per cent) of the arrears, followed by public universities and colleges at KSh 762.27 million (21.85 per cent). The delays illustrate how public‑sector payment bottlenecks can transmit liquidity pressure across SACCOs even when borrowers remain salaried.
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The SACCO asset base expanded to KSh 1.076 trillion in 2024, with loans accounting for 73 per cent of total assets. Investment in property, equipment, and other assets rose modestly to KSh 53.57 billion, including KSh 14.81 billion in investment property holdings. Meanwhile, opaque “other assets” declined to KSh 7.84 billion, reflecting efforts to strengthen balance sheet transparency.
The sector’s heavy reliance on credit and payroll remittances leaves it exposed to systemic risks. Regulators are expected to maintain close oversight as cooperative lenders balance growth, governance, and financial stability in future.
By Masaki Enock
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