Cash-Rich and Growing: SACCOs Maintain 69% Liquidity Ratio Despite NPL Pressure
Kenya’s regulated Sacco sub-sector has demonstrated commendable growth amidst a challenging economic environment, with total assets expanding by 11.88% to hit Ksh 1.16 trillion in the year ending September 2025.
The Quarter Three Statistical and Soundness Report released by the Sacco Societies Regulatory Authority (SASRA) indicates a resilient sector that has seen double-digit growth across all key performance parameters, including deposits, gross loans, and capital reserves.
Double-Digit Growth in Key Metrics
The report reveals that between September 2024 and September 2025, total deposits mobilized by regulated SACCOs grew by 11.40%, rising from Ksh 731.25 billion to Ksh 814.64 billion.
This liquidity boost fueled a lending spree, with gross loans increasing by 12.85% to reach Ksh 923.69 billion, up from Ksh 818.53 billion the previous year.
Financial stability within the sector also appears to be strengthening significantly. The report highlights a massive 24.30% surge in Reserves, which jumped from Ksh 193.49 billion to Ksh 240.51 billion. This accumulation of capital buffers suggests that SACCOs are increasingly retaining earnings to cushion against potential shocks.
Total income for the sector also saw a healthy uptick, crossing the Ksh 120 billion mark to reach Ksh 122.12 billion, a 10.17% increase year-on-year.
Asset Quality Concerns Persist
Despite the impressive growth figures, the quality of the loan book remains a point of focus for the regulator.
For Deposit-Taking SACCOs (DT-SACCOs), the Non-Performing Loans (NPL) ratio stood at 7.17% in September 2025. While this is an improvement from the 7.30% recorded in September 2024, it remains above the regulator’s recommended benchmark of less than 5%.
The situation is slightly more pronounced in the Non-Withdrawable Deposit-Taking (NWDT) segment, where the NPL ratio rose to 8.41% in September 2025, up from 7.85% in the previous quarter (June 2025).
Strong Liquidity and Capital Adequacy
The industry remains highly liquid, providing assurance to depositors.
DT-SACCOs reported an average Liquidity Ratio of 69.56% against a prescribed minimum of 15%. While this is a slight dip from the 70.25% recorded in 2024, it indicates that SACCOs are holding significant liquid assets to meet member withdrawals and operational needs.
Capital adequacy ratios also remained well above regulatory thresholds:
- Core Capital to Total Assets for DT-SACCOs stood at 18.53%, well above the 10% minimum.
- Core Capital to Total Deposits was recorded at 26.60%, more than triple the statutory minimum of 8%.
For NWDT-SACCOs, the Core Capital to Total Assets ratio improved to 12.67%, up from 12.38% the previous year, signaling a strengthening capital base across the broader industry.
Profitability on the Rise
The sector’s efficiency and earning power have also shown improvement. The Return on Assets (ROA) for DT-SACCOs climbed to 3.17% in September 2025, up from 3.09% in the same period in 2024.
SASRA’s report attributes the sector’s performance to the continued availability of liquid funds to finance portfolio growth and the overall improved asset structure.
