By Benson Nyangweso
The government’s proposal to channel billions of shillings held by Savings and Credit Co-operative Organisations (SACCOs) into national infrastructure projects has ignited a fierce debate across Kenya’s co-operative movement, with supporters hailing it as a bold step towards domestic self-financing and critics demanding ironclad guarantees before a single shilling of members’ savings is committed.
The proposal, championed by the Ministry of Co-operatives and MSMEs Development under Cabinet Secretary Wycliffe Oparanya, seeks to unlock the vast financial resources accumulated by SACCOs to support the government’s ambitious infrastructure agenda. The idea aligns with President William Ruto’s long-standing call for Kenya to finance more of its own development using domestic capital rather than relying heavily on expensive foreign borrowing. Supporters describe it as an innovative approach to funding national development; critics warn that members’ savings must never be exposed to unnecessary risk.
Kenya’s SACCO movement is among the largest in Africa, with millions of members and assets worth well over Ksh 1 trillion. These funds, generated from members’ monthly savings and deposits, have traditionally been invested in loans, government securities, fixed deposits and other relatively secure financial instruments. Under the new proposal, a portion of these resources could be channelled into carefully structured infrastructure investments, potentially encompassing roads, housing, energy, transport and other strategic national projects.
As concerns spread that the State intended to “raid” members’ savings, CS Oparanya moved to reassure Kenyans that the government had no intention of seizing control of SACCO funds or the co-operative movement more broadly. “We do not intend as a government to control the co-operative movement, but we want to encourage it to be self-sustaining. The responsibility of the government is to create an enabling environment for the co-operative movement to thrive,” Oparanya said recently during an international co-operative meeting in Mombasa. The CS maintained that any investment would remain a commercial decision made by individual SACCOs in accordance with their own governance structures and regulatory requirements.
The proposal comes as Kenya continues to grapple with rising public debt and mounting costs of financing major infrastructure projects. Government officials argue that mobilising domestic savings would reduce dependence on costly foreign loans, retain investment capital within Kenya, provide SACCOs with long-term investment opportunities and accelerate the delivery of critical infrastructure. Officials believe that if properly structured, such investments could offer stable returns while simultaneously financing national development.
The proposal, however, arrives at a particularly sensitive moment for the co-operative movement. The near-collapse of KUSCCO’s financial position, ongoing investigations into Metropolitan National SACCO, and governance failures in several co-operatives have severely shaken public confidence. The Ministry itself has acknowledged that reforms are necessary to restore trust, strengthen governance and protect members’ savings.
Only recently, Oparanya warned that there was “no room for weak governance” as the government rolled out sweeping reforms across the co-operative sector. While many SACCO leaders acknowledge that infrastructure investments can provide attractive long-term returns, they are expected to insist on robust safeguards before committing members’ money. Industry officials say any investment would need to satisfy strict criteria, including guaranteed security of members’ funds, competitive commercial returns, independent professional management, clear legal protections, and full transparency and accountability.
Among SACCO members, reactions have been mixed. Some welcome the proposal, arguing that if investments are properly managed and underpinned by government guarantees, they could generate better returns than conventional instruments while contributing to Kenya’s economic growth.
Others remain deeply sceptical, fearing that political interference or poor governance could expose ordinary savers to losses. Several members interviewed by The Weekly Vision questioned why the government is seeking access to SACCO funds whilst unresolved cases involving billions of shillings lost through governance failures remain under investigation. Many argue that confidence must first be restored before SACCOs commit resources to large-scale national projects.
The proposal also comes as Parliament finalises a new Co-operatives Bill aimed at modernising the sector through stronger governance, enhanced transparency and digital reform. Deputy President Kithure Kindiki recently indicated that the new law would strengthen accountability and improve the management of co-operatives before President Ruto assents to the legislation.
For the millions of Kenyans whose monthly savings are tied up in SACCOs, the government’s proposal presents both opportunity and risk. If managed prudently, it could create a new source of affordable development financing whilst generating sustainable returns for members. Without robust governance, legal safeguards and transparent oversight, however, it also risks eroding confidence in one of Kenya’s most trusted financial institutions.
