NAIROBI, Kenya – The government is pushing for the merger of small Savings and Credit Co-operatives (Saccos) in a bid to strengthen financial stability and streamline regulation in the sector.
Co-operatives Cabinet Secretary Wycliffe Oparanya said many Back Office Service Activity (Bosa)-only Saccos are either inactive or too weak to survive on their own, as they serve few members and contribute little to financial inclusion.
“A time has come for the Sacco sector to explore market-driven solutions of consolidations and mergers of these many small Bosa-only Saccos. This is the only way to ensure their financial viability and stability,” Oparanya said during the launch of the Sacco Supervision Annual Report 2024.
In Saccos, members buy shares that form the capital base for issuing loans. Unlike deposits, share capital cannot be withdrawn but can be transferred to another member when one exits.
The report revealed that out of the 355 Saccos regulated by the Sacco Societies Regulatory Authority (Sasra), just 40 control nearly two-thirds of the Sh749.4 billion total deposits—highlighting the dominance of a few large players.
Oparanya cited a recent merger in Kirinyaga County, where a small Sacco integrated with a bigger one, giving members access to broader services.
He urged co-operatives with similar social and economic ties to consider similar consolidations to safeguard their future.
The government is also keen to enhance regulatory efficiency. Currently, Sasra oversees only Saccos with deposits above Sh100 million, leaving hundreds of smaller ones under the Commissioner of Co-operatives, where oversight is weaker.
“Governance in Saccos is still a matter of grave concern for the government,” Oparanya said, adding that mergers would not only bolster financial health but also improve accountability.
The push comes as the cooperative sector faces increasing pressure to modernize, with regulators working to bring all Saccos under Sasra’s supervision.
