State Department of Co-operatives warned sacco societies against aggressive expansion into specialised investment schemes as the sector’s investment portfolio approaches KSh100bn.
Principal Secretary for Co-operatives Patrick Kilemi told sacco managers and directors that deploying members’ money into higher-return schemes carries greater risk than traditional instruments such as government securities.
He said members expect to see prudent decisions and quoted, “When members ask ‘Where is our money?’ they must see that you (management) made a prudent decision.”
Kilemi added that personal investment choices differ from those involving sacco funds, stating, “As a CEO or director, you can go offshore, even in the Cayman Islands. But when it comes to sacco funds, it is a question of responsibility and having control.”
Data from the Sacco Societies Regulatory Authority (Sasra) showed total financial investments by regulated saccos rose 63 per cent to KSh99.81bn in 2025, up from KSh61.21bn in 2024.
The increase was driven largely by collective investment schemes, whose holdings jumped to KSh19.55bn in 2025 from KSh5.52bn in 2024, raising their share of the portfolio to 19.79 per cent from 9.02 per cent.
Special funds, a subset of collective schemes, accounted for 23.9 per cent of such schemes at the end of March 2026, with KSh203.5bn invested in them.
Government securities remained the largest traditional investment, with sacco holdings rising to KSh23.64bn in 2025 from KSh21.35bn.
Placements in national co-operative organisations (NACOs) grew to KSh25.68bn in 2025 from KSh14.33bn, while sacco shares in NACOs increased to KSh29.99bn from KSh19.31bn.
The regulator attributed the rise in NACO placements to greater inter-sacco collaboration, confidence in co-operative institutions, liquidity needs and a desire to strengthen movement ownership.
Kilemi warned that the sector must balance public oversight with private decision-making, describing the pendulum between the two as needing to stay in the middle.
The Capital Markets Authority also cautioned investors in July against funds promising abnormal returns amid growing interest in alternative investment products.
