The Government has assured Kenyans that savings held by Savings and Credit Cooperative Societies (SACCOs) are safe and will not be used to finance public infrastructure projects, dismissing media reports suggesting otherwise as false and misleading.
State Department for Cooperatives Principal Secretary Patrick Kilemi said reports alleging that more than Sh1 trillion held by SACCOs would be channeled into infrastructure development had caused unnecessary anxiety among millions of cooperative members.
Speaking in Nairobi on Monday, Kilemi stressed that SACCO deposits remain the exclusive property of individual cooperative societies and are managed independently by their elected leadership without government access or control.
“SACCO funds belong to their members. The Government of Kenya has no access to these deposits and has never proposed using them to finance public infrastructure projects,” he said.
Kilemi clarified that during the recent Ushirika Day celebrations, the Deputy President explained that the proposed National Infrastructure Fund would initially be capitalised using proceeds from the sale of government shareholdings in selected state investments, including Kenya Pipeline Company and Safaricom.
He said the fund is intended to create fiscal space by financing selected infrastructure projects while allowing more public resources to be directed towards priority sectors, including cooperatives.
“At no point did the Deputy President or the government state that SACCO savings would be used for the infrastructure fund,” Kilemi said.
The Principal Secretary disclosed that the ministry had formally demanded that Nation Media Group retract the report, apologise to the public and publish a correction with the same prominence as the original story.
He warned that inaccurate reporting on the cooperative movement could erode public confidence in a sector that plays a critical role in Kenya’s financial system.
“This kind of misinformation can undermine confidence in a sector that plays a vital role in financial inclusion and Kenya’s socio-economic development,” he said.
Kilemi noted that the cooperative movement serves about 14 million Kenyans, including more than eight million SACCO members, making accuracy in reporting essential to protecting public trust.
He explained that SACCOs operate as autonomous, member-owned financial institutions whose primary mandate is to mobilise savings and provide affordable credit to members.
According to the PS, most deposits received by SACCOs are immediately advanced as loans to members, meaning the institutions do not maintain large idle cash balances available for unrelated investments.
“Our SACCOs practise financial intermediation. Member deposits are largely converted into loans, meaning there are no large cash reserves waiting to be invested elsewhere,” he said.
Kilemi acknowledged that some large SACCOs have accumulated surplus institutional capital through retained earnings and reserves accumulated over time.
He said proposed amendments to the SACCO Act seek to establish a shared liquidity framework that would enable SACCOs with excess liquidity to support others experiencing temporary liquidity shortages, thereby strengthening the stability of the cooperative financial sector.
The PS added that if investment opportunities such as infrastructure bonds become available in future, participation by SACCOs would remain entirely voluntary and would only be considered by institutions with surplus liquidity after approval by their members.
“Any investment by a SACCO is a decision made by its members through their annual general meeting and must comply with the institution’s investment policy and the applicable regulatory framework,” he said.
Kilemi emphasised that all SACCO investments are governed by Kenyan laws and regulations and can only be made in approved investment instruments under the oversight of relevant regulatory bodies, including the Central Bank of Kenya, the Capital Markets Authority and, where applicable, the Retirement Benefits Authority.
“Our priority is to safeguard members’ savings. SACCO funds can only be invested within regulated frameworks that protect members’ interests,” he said.
Kenya’s cooperative movement remains one of the largest in Africa, with more than 25,000 registered cooperatives operating in agriculture, housing, manufacturing and financial services. The sector serves millions of members, manages assets worth more than Sh1.2 trillion and continues to play a leading role in promoting savings, expanding access to affordable credit and advancing financial inclusion across the country.
by Wangari Ndirangu
