Key takeaways:
- Kenya’s government is looking to draw on more than Ksh1 trillion ($7.7 billion) held in Saccos
- The plan is linked to the National Infrastructure Fund
- Sacco membership has grown to nearly 8 million people
Kenya’s government is looking to tap into the more than Ksh1 trillion ($7.7 billion) Kenyans have saved in Saccos, the country’s public cooperative savings institutions, to help finance the country’s next wave of infrastructure projects.
The Deputy President Kithure Kindiki outlined the plan during Ushirika Day celebrations at Uhuru Park in Nairobi.
He said the government intends to shift eligible infrastructure projects to the National Infrastructure Fund, a move he said would create room in the national budget to support other sectors, including cooperatives.
The National Infrastructure Fund has already secured Ksh345 billion ($2.67 billion) in seed capital from the sale of state agencies, part of a wider Ksh5 trillion ($38.7 billion) roadmap the government has laid out to fund development projects without adding to public debt.
Kindiki said routing infrastructure spending through the fund would free up fiscal space for priority sectors that have struggled to secure adequate budget allocations in recent years.
“We are going to create a bit of fiscal space in the budget by offloading some of the projects that can now be funded by the National Infrastructure Fund,” he said. “Therefore, we will have a little more leeway to fund key sectors, including the cooperatives sector.”
The announcement comes as Kenya’s cooperative movement grows rapidly.
Sacco membership stands at nearly 8 million people, and sector assets have surpassed Ksh1 trillion ($7.7 billion) for the first time, according to figures President William Ruto cited last month.
Of more than Ksh500 billion ($3.87 billion) advanced as credit by regulated Saccos, about a quarter has gone toward land acquisition and housing, while more than a fifth has financed education.
Reforms aim to protect members’ savings
The push to draw on Sacco capital comes alongside broader reforms to the sector. The Sacco Societies (Amendment) Bill, 2025, is currently before Parliament and is expected to be signed into law by Ruto within a month.
The bill proposes a Deposit Insurance Fund that would protect members’ savings if a Sacco collapses, calculated after deducting outstanding loans and other liabilities.
Lawmakers have pushed back on a proposed Ksh100,000 ($774) compensation cap under the bill, arguing it would leave members with larger savings exposed to significant losses if their Sacco fails. The bill also proposes establishing secondary Saccos, or umbrella institutions, that would pool smaller societies together for shared services and liquidity support.
Some Saccos have opposed a separate clause that would force institutions with deposits below Ksh100 million ($774,000) to merge with larger ones. Officials from smaller cooperatives have warned the requirement could cause job losses and weaken grassroots financial inclusion, particularly in rural areas where Saccos remain the main source of affordable credit.
Confidence in the sector has been tested
The reforms follow a period of governance troubles in parts of the Sacco sector, most notably at the Kenya Union of Savings and Credit Cooperatives, where a government audit found evidence of illegal deposit-taking and unlicensed investments in housing and insurance ventures.
The scandal left some members unable to recover their savings for years.
Cabinet Secretary for Co-operatives and MSMEs Development Wycliffe Oparanya said investigative agencies have completed their work on the matter and shared findings with relevant authorities to pursue legal action and asset recovery. He said the government has directed the formation of a new board to oversee KUSCCO’s revival and restore public confidence in the institution.
Despite the setbacks, officials maintain that Saccos remain central to Kenya’s development strategy. Ruto has described cooperatives as strategic pillars of the economy rather than peripheral financial institutions, pointing to their role in funding housing, education and small business growth across the country.
