Kenya’s SACCO sector ended 2024 with total gross loans rising to KSh 845.11 billion, up from KSh 758.57 billion the previous year, while the non-performing loan ratio remained steady at 8.39%, according to data from the SACCO Societies Regulatory Authority.
The figures indicate that although loan provisions increased to KSh 55.69 billion from KSh 52.35 billion, credit expansion, which stood at 11.41%, is still outstripping the pace of risk coverage.
Compared to commercial banks, SACCOs appear to be in a more favourable position. Kenya’s banking sector closed FY25 with an estimated NPL ratio of 15.5%, more than double the SACCO average, based on the Kenya Banking Sector Report by Wall Street Africa Group.
Within the SACCO space itself, performance varies widely. Agriculture-based SACCOs recorded the highest default rates at 18.69%, while private-sector deposit-taking SACCOs posted a significantly lower 5.73%. Government-linked SACCOs, meanwhile, averaged 10.13%.
Overall, 86.71% of SACCO loans, amounting to KSh 732.84 billion, were classified as performing in 2024, a slight improvement from 86.52% in 2023. Loans under watch, defined as those overdue by between one and 30 days, declined to 4.90% from 5.22%, pointing to better early-stage recovery efforts, even as more troubled loan categories saw a marginal increase.
Among non-deposit-taking SACCOs, community-based institutions posted an NPL ratio of 13.29%, compared to 4.75% for government-linked entities and a remarkably low 0.19% for public university SACCOs, underscoring stark differences in credit quality across the sector.
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At the institutional level, 68 deposit-taking SACCOs reported NPL ratios below 5%, while 109 exceeded that mark, including 68 institutions with ratios above 10%. This suggests that, despite overall sector stability, pockets of high-risk lending remain entrenched.
A key structural issue persists, with many regulated SACCOs functioning largely as payroll-based lenders rather than purely member-driven credit institutions. This model ties their liquidity to the consistency of employer remittances, particularly within the public sector.
In 2024, unremitted payroll deductions climbed to KSh 3.49 billion, up from KSh 2.59 billion the year before, affecting 85 institutions and over 55,000 members. Notably, 74.5% of these funds were meant for loan repayments.
County governments and assemblies accounted for the largest share of the arrears at KSh 1.61 billion, representing 46.07%, followed by public universities and colleges at KSh 762.27 million, or 21.85%. These delays highlight how disruptions in public-sector payments quickly translate into liquidity strain for SACCOs, even where borrowers remain formally employed.
Meanwhile, the sector’s total asset base grew to KSh 1.076 trillion in 2024, with loans continuing to dominate at 73% 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. At the same time, less transparent “other assets” declined to KSh 7.84 billion, suggesting a gradual shift toward clearer asset allocation.
