Naivasha: Cooperatives have been urged to accelerate their strategies to enhance capital retention by expanding their credit provisions to members. The current loan provision in the Sacco subsector stands between 10 and 11 percent, but there is potential to increase this to over 15 percent annually. Vincent Marangu, Director-In-Charge of the Cooperative Banking Division at the Cooperative Bank of Kenya, emphasized the need for credit unions to focus on boosting retained earnings in line with global standards.
According to Kenya News Agency, Marangu highlighted the issue at the 4th Annual Cabinet Secretary for Cooperatives and MSME’s Consultative Forum in Naivasha. He pointed out that Saccos currently earn between five and six percent of their gross earnings. He challenged the sector to provide more affordable credit, noting that current loan growth of 10 to 11 percent annually is insufficient and should be increased to at least 15 percent.
The World Cooperative Monitor (WCM) Report 2025, recently released by the International Cooperative Alliance and the European Research Institute on Cooperative and Social Enterprises, served as a wake-up call. It highlighted that none of the 300 global cooperatives featured in the report are from Africa in terms of turnover. The report noted a combined turnover of USD 2.79 trillion among the top 300 global co-ops, with agriculture, insurance, and retail sectors leading.
Marangu stated that the Kenyan cooperative movement, ranked first in Africa for deposits and membership and seventh globally, needs to increase investments to exploit its potential fully. He suggested consolidating businesses such as housing, dairy, agriculture, and transport to compete globally and enhance product innovation.
Despite challenges, Marangu acknowledged the progress made by Coop Bank in Kenya, which was ranked among the top 10 commercial banks globally in the financial services category. The WCM Report 2025 rated Coop Bank ninth among the top 300 cooperative financial institutions, with a notable banking income/GDP per capita of USD 217,873 in 2023.
Daniel Marube, CEO of the Cooperative Alliance of Kenya, stressed the need for sector stakeholders to identify and address gaps hindering growth, such as lack of affordable credit services and expensive farm inputs. He highlighted the importance of trust and good governance in the sector’s impressive performance.
During the three-day forum, stakeholders in the cooperative movement discussed ways to strengthen their skills and improve governance of SACCO member resources. Marube emphasized the goal of building strong cooperative institutions to provide affordable financial services and promote a culture of savings.
The 4th Annual Cabinet Secretary for Cooperatives and MSME’s Consultative Leaders Forum, organized by CAK, is themed ‘Shaping the Future of Co-operatives: Leadership, Innovation, and Sustainable Growth.’ CAK represents all registered cooperative societies under the Co-operative Societies Act and serves over 14 million Kenyans, mobilizing significant national savings and contributing to Kenya’s socio-economic growth.
