Cabinet Secretary for Cooperatives and MSMEs Development, Wycliffe Oparanya, has urged smaller SACCOs to consider merging with larger, regulated SACCOs to ensure sustainability and competitiveness.
Oparanya stated, “Consolidation is the way to go. Small SACCOs must think about merging with stable counterparts to survive and thrive in today’s competitive financial landscape.”
He cited a successful merger guided by SASRA in Kirinyaga, where a small SACCO merged with a larger one, resulting in improved service delivery and economies of scale. Nufaika Sacco merged with Fortune Sacco.
The Cabinet Secretary affirmed the ministry’s support for such initiatives and encouraged proactive leadership and member-focused governance. According to the latest SASRA Sacco Annual Supervision Report for 2024, out of 355 regulated SACCOs, 216 of them have relatively small balance sheets of less than Kshs 1 billion in assets, totaling Kshs 79.66 billion, which is only 7.40% of the total assets.
“Such small balance sheets undermine their competitiveness in the credit business, which today heavily relies on robust ICT and technological platforms—resources that these SACCOs can hardly afford,” Oparanya said.
He also noted that many BOSA-only (Non-Withdrawable Deposit Taking, NWDT) SACCOs have deposits below the Ksh 100 million threshold and are not under SASRA’s prudential supervision. “My Ministry is therefore looking into ways to bring this segment of SACCOs under SASRA,” he added.
“A majority of these BOSA-only SACCOs have very small balance sheets. This implies that they cannot generate sufficient resources or revenue needed to comply with the prescribed prudential regulatory standards, deploy ICT in their operations, and meet members’ needs or expand operations, among other challenges. I am also aware that some of these SACCOs lack the technical know-how to ensure compliance with prudential regulations,” he said.
He observed that many small BOSA-only SACCOs across the country are inactive and exist only on paper. “The few that are active are neither stable nor financially viable, as they serve only a handful of members and have limited impact on financial inclusion,” the CS stated.
He emphasized that it is time for the SACCO sector to explore market-driven solutions, such as the consolidation and merger of these numerous small BOSA-only SACCOs. “This is the only way to ensure their financial viability and stability,” he asserted.
He urged officials of SACCOs operating within the same or similar traditional economic and social common bonds to begin discussions about mergers as a solution for their survival.
