Cooperatives have been asked to fast-track strategies to enhance capital retention through expanding credit provision to members.
The loan provision to members in the Sacco subsector currently stands at between 10 per cent and 11 per cent, but the financial institutions have the capability of increasing it to more than 15 percent annually.
Director-In-Charge of the Cooperative Banking Division at the Cooperative Bank of Kenya, Vincent Marangu, called upon credit unions to work on plans to boost retained earnings, according to global practices.
Speaking during the 4th Annual Cabinet Secretary for Cooperatives and MSME’S Consultative Forum with co-operative movement stakeholders in Naivasha, the Director said that Saccos currently are able to earn between five percent and six per cent of their gross earnings.
“When we look at our SACCO sub-sector, one of the things we are challenging ourselves with is how do we expand affordable credit to our members? and though the role is done well, we are seeing loan growth in the sector just averaging 10 to 11 percent year in, year out. this should not be adequate, but we should strive to move to heights of 15 per cent,” he observed.
Marangu said that the World Cooperative Monitor (WCM) Report 2025, the 13th Edition that was recently released by the International Cooperative Alliance (ICA) and the European Research Institute on Cooperative and Social Enterprises (EURICSE), should be a wake-up call, considering that among the 300 highlighted cooperatives in the world, globally, there is no cooperative in Africa that is featured in terms of turnover.
According to the Report, the top 300 global co-ops and mutuals revealed a combined USD 2.79 trillion turnover (based on 2023 data), with agriculture, insurance, and retail dominating sectors. The Report emphasizes co-ops’ vital role in economic stability, job creation, and sustainable development.
Leading sectors as cited by the Report, include agriculture (35.7 per cent), insurance (31.7 per cent), and wholesale/retail (18 per cent), which dominate, accounting for over 80 per cent of the impact.
Marangu stated that the Kenya cooperative movement, therefore, needs to extend more investment with a view to fully exploit the endowed potential.
The Kenya cooperative movement is rated position one in Africa in terms of deposits and membership and position seven globally, but the respective cooperative institutions, especially the financial cooperatives, are still lagging behind credit unions in America and Europe.
“This means consolidating businesses such as housing, dairy, agriculture, transport, hardware, and real estate. Equally, this can be achieved through creating great entities that can endure global cutthroat competition and further enhance product innovation,” he added.
Marangu, however, said that all is not lost, as Coop Bank in Kenya was appraised under the financial services category among other financial institutions globally that provide banking and financial intermediation services and ranked among 10 commercial banks.
“The WCM Report 2025 rated the Cooperative Bank in position nine out of the top 300 cooperative financial institutions on high turnover, over gross domestic product per capita, demonstrating an extension of significant input in economic development,” he said.
The Coop Bank recorded USD 217,873 in banking income/GDP per capita in 2023, with Groupe Crédit Agricole from France leading with USD 870,851, followed by Cooperative Financial Network Germany (BVR) with USD 727,318.
The Director stated that the rating of the Bank demonstrates the strength and continuous growth of Kenya’s multibillion cooperative sector.
“Our Bank, which has been the engine of the cooperative movement in the country since the 1960s, has recorded an exemplary performance, owing to a strong and well-steered cooperative movement,” said Marangu.
Cooperative Alliance of Kenya (CAK) Chief Executive Officer (CEO) Daniel Marube emphasised the need to take stock in the sector with a view to identifying gaps derailing growth.
“Kenya’s cooperative sector has made great strides in the world. However, the sector stakeholders need to pursue serious dialogue to address emerging gaps, mainly lack of affordable credit services, low extension services, and expensive farm inputs,” said Marube.
He observed impressive performance in the sector has been realised through trust and confidence attributes he said need to be upheld.
“We have invested greatly in addressing challenges, mainly good governance, affordable financial services, and boosting extension services. The cooperative sector is a key ingredient for growth,” Marube said.
During the three-day forum, Marube said, “We will see stakeholders in the cooperative movement challenging each other and sharpening their skills in order to be good custodians and good governors of SACCO member resources.”
“our goal is to build strong cooperative institutions through which our members can access affordable financial services, develop the culture of savings, and therefore build wealth through their entrepreneurial activities that individually they are taking,” Marube noted.
The 4th Annual Cabinet Secretary for Cooperatives and MSME’s Consultative Leaders Forum taking place this week and organised by CAK, is running under the theme “Shaping the Future of Co-operatives: Leadership, Innovation, and & Sustainable Growth.”
CAK represents all registered co-operative societies under the Co-operative Societies Act, spanning National Co-operative Organizations, Co-operative Unions, and Primary Co-operative Societies. Collectively, the Movement serves over 14 million Kenyans, mobilising savings of more than Sh 800 billion, which is about 30 percent of national savings, and standing as a critical pillar of Kenya’s socio-economic growth.
By Wangari Ndirangu
