NAIROBI, January 11, 2026 — The Kenyan Government has announced wide-ranging reforms to Kenya’s cooperative financial system following governance failures that resulted in losses of Ksh 13 billion at the Kenya Union of Savings and Credit Cooperatives [KUSCCO] and Ksh 7 billion affecting Metropolitan SACCO members.
Speaking at the KUSCCO 10th Annual Leaders’ Summit held recently at the Sarova Whitesands Hotel in Mombasa recently, the Cabinet Secretary for Cooperatives and MSME Development, Wycliffe Oparanya, reaffirmed the Government’s commitment to stabilising the SACCO ecosystem in the wake of recent governance breaches.
“We must ensure that legislation protects members’ savings,” Oparanya said, adding that proposed amendments to the SACCO Act would entrench transparency, digital integration and institutional accountability.
The Cabinet Secretary emphasised that Kenya, ranked eighth globally and first in Africa for cooperative financial systems, must strengthen its governance frameworks to maintain its leadership position.
Among the proposed measures is the strengthening of the SACCO Societies Regulatory Authority (SASRA) as the principal supervisory body, alongside the establishment of a Deposit Protection and Savings Stabilisation Fund to safeguard members’ deposits.
The Government also plans to roll out shared digital platforms to lower technology costs and enhance cyber resilience, as well as a Central Equity Facility to provide emergency liquidity support to distressed SACCOs.
A key reform will require mandatory professional registration for SACCO executives to prevent individuals implicated in governance failures from moving between institutions.
“Those who create governance failures in one SACCO will not be allowed to shift to another. Integrity is non-negotiable,” Oparanya said.
KUSCCO National Chairman David Mategwa reported progress in recovering lost assets, noting that property auctions were underway to compensate affected SACCOs.
“Recoveries are ongoing, auctions have begun and funds are being returned. Although challenges remain, we have cleared pending bills and resumed our advocacy mandate,” Mategwa said.
He urged SACCOs to continue honouring their subscriptions and to participate in leadership training programmes to strengthen the cooperative movement.
Mategwa described the reforms as a turning point for SACCO regulation and governance, aimed at rebuilding trust and driving innovation-led growth across the sector.
Meanwhile, the SACCO industry in Kenya recorded strong growth up to September 2025, with notable improvements across key indicators, according to SASRA.
Over the year, sector reserves grew by 24.30 per cent while gross loans expanded by 12.85 per cent, reflecting sustained member confidence and sound portfolio management, despite slightly slower growth in the most recent quarter.
Between June and September 2025, SACCOs mobilised nearly Ksh 20 billion in deposits and disbursed more than Ksh 131 billion in loans. Strong loan repayments continued to support new lending and bolster reserves.
By the end of September 2025, total sector assets stood at Ksh 1.156 trillion, underscoring the SACCO industry’s expanding role in financial inclusion and enterprise financing.
Buy your copy of thecooperator magazine from one of our country-wide vending points or an e-copy on emag.thecooperator.news
-
-
-
-
