When Kenya inaugurated the devolved system of government, the promise was as profound as it was clear: to bring resources, services, and decision-making power directly to the people. More than a decade into this constitutional journey, one of the most compelling success stories has been the meteoric rise of Savings and Credit Cooperative Societies (SACCOs) across the 47 counties. This shift has not only moved money closer to the people but has fundamentally reshaped how communities build wealth.
Prior to the 2010 Constitution and the subsequent 2013 transition, the cooperative movement was a heavily centralized affair. Managed largely from the capital, Nairobi, the sector often struggled to reach the “unbanked” in rural and semi-urban frontiers. Financial services were concentrated in major urban hubs, leaving small-scale entrepreneurs, dairy farmers, and boda boda operators with limited avenues for affordable credit. Under the old centralized model, the distance between the regulator and the member was measured in hundreds of miles and significant bureaucratic red tape.
Devolution fundamentally altered this landscape. By stimulating local economies through market development, agricultural subsidies, and infrastructure projects, county governments have created a fertile environment where money circulates at the grassroots. Industry experts often note that where wealth is generated, savings inevitably follow. Consequently, SACCOs have stepped in as the primary custodians of this local wealth, evolving into the trusted institutions where income is stored, borrowed, and reinvested.
The Fourth Schedule of the Constitution explicitly transferred the responsibility for the development and regulation of cooperative societies to county governments, while the national government retained the role of policy formulation. This shift birthed fully-fledged departments for Trade and Cooperative Development within devolved units. These departments now offer localized audits, governance training, and policy frameworks that were previously difficult to achieve. The management of cooperative societies has become more proximate, allowing for a more rapid response to local issues and more direct interaction between members and the County Directors of Cooperatives.
This localized approach has fostered a new wave of financial inclusion. Specialized SACCOs, tailored to the specific needs of women’s groups, youth associations, and agricultural sub-sectors, are thriving. Because county administrations understand local economic realities better than a distant national office, they have been able to integrate cooperatives into County Integrated Development Plans. This links the cooperative movement directly to local job creation and economic growth. Instead of traveling long distances to urban centers, members can now access branches within their own towns and villages, building a level of trust and proximity that increases membership and participation.
The impact is visible in the self-sustaining cycle of growth now seen at the county level. Members are using SACCO loans to pay school fees, expand small businesses, purchase farm inputs, and invest in real estate. This creates local wealth rather than a dependency on external financing. As one veteran cooperative leader recently observed, when communities save together and borrow together, they inevitably grow together.
However, the rapid expansion of SACCOs under a devolved framework has not been without its growing pains. The shift from a centralized Commissioner for Cooperative Development to individual county oversight has occasionally been marred by capacity gaps and legal ambiguities. Many county governments initially lacked the technical staff and resources required to oversee complex, large-scale financial cooperatives. Furthermore, a persistent jurisdictional “push and pull” remains, particularly regarding how to regulate SACCOs that operate across multiple county boundaries.
Perhaps the most significant concern remains the risk of political interference. While devolution aimed to empower members, there are instances where the control of cooperatives has shifted from national bureaucratic oversight to local political meddling, which can compromise the autonomy of these member-owned institutions. Furthermore, some county governments have been criticized for viewing cooperatives primarily as a source of tax revenue rather than as partners in development.
For the movement to remain resilient, stakeholders agree that the growth of SACCOs must be matched by even stronger governance. There is an urgent need to modernize the Cooperative Societies Act to better align with the devolved structure, ensuring that county oversight is professional, transparent, and focused on member protection.
Devolution has done more than just strengthen county governments; it has empowered the cooperative movement to become an engine of financial inclusion and community resilience. If Kenya is to deepen its economic transformation at the grassroots, supporting SACCOs through robust, accountable devolved structures is no longer an option—it is a national imperative.
