SACCOs (Savings and Credit Cooperative Societies disbursed loans to members seeking to purchase land or a house totalling to KSh 32.7 Billion according to a recent third quarter report by the SACCO Societies Regulatory Authority(SASRA) for the period ending September 2025. This is a drop from KSh 33.01 billion disbursed to the land and housing sector in September 2024.
According to the latest SASRA Sacco Industry Statistical and Soundness Report, Loans for the Education sector was the second largest beneficiary at KSh 31.71 Billion, Agriculture KSh 21.94 Billion, Trade KSh 16.79 Billion, Consumption and Social Services KSh12.52 Billion; Finance Investments and Insurance KSh7.94 Billion, Manufacturing and Servicing Industries KSh5.01 Billion and Human Health KSh3.24 Billion. Total loans disbursed by SACCOs as at end of September this year reached KSh131.84 Billion from KSh124.98 Billion in September 2024.
Savings and Credit Cooperatives are key enablers in the facilitation of credit to their members, who ultimately finance various economic activities. In the agriculture sector, SACCO loans are popular for financing Crop Farming, Animal Production, Agricultural supporting services, Agribusiness as well as Forestry and Logging.
In September 2024, credit societies disbursed loan and credit facilities to members seeking to acquire plots or construct new houses. However, this amount has been on a decline from 33.24% in 2022 to 26.97% in 2023.
At the same time, credit society loans towards the agricultural sectors of the economy has been on an upward trajectory, albeit with marginal increases from 13.76% in 2022 to 16.96% in 2023 and 20.05% in 2024 probably buoyed by the good weather patterns over the last two (2) years as well as government interventions through subsidies.
The education sector of the economy remains the second highest beneficiary of the loans from SACCOs for the fourth year running, with loans having been issued to fund education mainly in the form of school and college fees.
This underscores the critical role being played by SACCOs in the education sector.
Under the land and housing sector credit union loans disbursed to land acquisition or purchase as well as loans disbursed towards housing purchase or construction.
Sacco members enjoy favorable credit scores owing to the guarantor method
The increase in the funding by Regulated SACCOs towards land and housing sectors is consistent with the findings of the Kenya National Bureau of Statistics (KNBS) Economic Survey, 2025, which reported that SACCOs made the highest financing arrangements towards the real estate. A move by commercial banks to cut their lending rates after intense pressure from monetary authorities, is attracting the attention of many financial services users. Sacco members enjoy high credit scores due to the guarantee scheme which gives them an advantage of other bank borrowers.
“This trend to lower interest rates on loans by banks does not really affect the business of SACCOs. What this development in the banking sector could mean is that those people who were considering joining a SACCO for purposes of getting a lower-interest loan may not have that motivation anymore. However, for those credit unions that still offer more competitive interest rates on their loan products to members, they remain more attractive than banks and will therefore continue to attract more business away from banks,” said George Yongo Ngala, Chief Executive Officer, Imarika DT SACCO Limited.
The 2024 FinAccess Survey, which highlights shifting financial preferences in Kenya, shows that Savings and Credit Cooperatives lead in the financial channels that Kenyans use per month, at 74.9 %, ahead of Banks at 58.7%, due to their use of this channel for loan repayments, savings contributions and salary deposits.
“The ultimate impact of the Savings and Credit Cooperative Societies model makes their loans cheaper than those offered by other players in the market. Borrowing from a credit society as a member gives one an opportunity to earn a dividend, rebates, benevolent services among others. These benefits are not available to one who takes out a bank loan, “said Solomon Atsiaya, Chief Executive Officer, Kenya National Police DT SACCO Limited.
He gives the example of a borrower from a credit society who is charged an interest of 13% while the same credit union pays out a dividend rate of 10%. “This means that the effective cost of that credit union loan is reduced to about 3%,” said Atsiaya.
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