Published: May 9, 2026
According to new supervisory data from the SACCO Societies Regulatory Authority (SASRA), the industry’s gross loans hit KSh 845.11 billion, up from KSh 758.57 billion a year earlier. That is 11.41% credit growth. But here is the kicker: the non-performing loan ratio held steady at 8.39%.
Banks Are Bleeding More Than The SACCOs
Compare that to Kenya’s banking sector. Banks ended financial year 2025 with an estimated NPL ratio of 15.5% — more than double the SACCO average. That data comes from the FY25 Kenya Banking Sector Report by Wall Street Africa Group.
Provisions for bad loans at SACCOs rose to KSh 55.69 billion from KSh 52.35 billion. That suggests credit growth is actually outpacing risk provisioning. In plain English: SACCOs are lending more and managing the risk better.
Are All SACCOs The Same?
Before you rush to join the nearest SACCO, pump the brakes. The industry average hides some ugly numbers.
Agriculture-based SACCOs recorded the highest NPL ratio at 18.69%. If you lend to farmers, you get burned more often. That is just the reality of weather, markets, and harvest cycles.
Private-sector deposit-taking SACCOs posted a much lower 5.73%. Government-linked ones averaged 10.13%. So the safest place for your money? Private sector. The riskiest? Agriculture.
The Payroll Problem Nobody Talks About
Here is where things get interesting. Regulated SACCOs mostly operate as payroll-linked lenders. They are not purely member-driven credit institutions. That means their cash flows depend entirely on employers actually sending in the deductions they take from workers’ salaries.
In 2024, unremitted payroll deductions rose to KSh 3.49 billion, up from KSh 2.59 billion a year earlier. That affected 85 institutions and 55,602 members. Nearly 75% of those funds were supposed to go toward loan repayments.
Who is the worst offender? County governments and assemblies. They accounted for KSh 1.61 billion of the arrears — that is 46.07% of the total. Public universities and colleges came second at KSh 762.27 million, or 21.85%.
So here is the quiet crisis: even when borrowers are salaried and willing to pay, SACCOs cannot get their money if county governments and universities do not remit the deductions. That is not a lending problem. That is a collection problem baked into the system.
The Good, the Bad, and the Ugly
At the institutional level, 68 deposit-taking SACCOs reported NPL ratios below 5%. That is genuinely good. But 109 institutions remained above that threshold, and 68 of those had ratios exceeding 10%. So while the industry looks stable on average, there are real pockets of high-risk lending.
The asset base of all SACCOs rose to KSh 1.076 trillion in 2024. Loans accounted for 73% of that. The rest is in property, equipment, and other investments. One small but telling detail: investments in “other assets” — the kind of vague category that often hides trouble — dropped to KSh 7.84 billion. That is a good sign. Transparency is improving.
Summary
SACCOs are not perfect. But compared to banks, they look like the responsible older sibling. The gap between 8.39% and 15.5% is massive. However, the payroll deduction mess with county governments is a ticking bomb. If that KSh 3.49 billion in unremitted funds keeps growing, even the best-run SACCOs will start feeling the squeeze.
For now though, the numbers say this: SACCOs are lending more, managing risk better, and keeping bad loans far below what banks are reporting. That is worth paying attention to.
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