State Denies Plan To Tap SACCO Savings For National Infrastructure Fund

By Our Correspondent

The government has moved to reassure millions of Savings and Credit Co-operative Organization (SACCO) members that their deposits remain safe and outside state control, after dismissing as misleading an NTV report suggesting the funds could be used to finance mega infrastructure projects.

Principal Secretary for Co-operatives Patrick Kilemi said the report aired during NTV Prime News on July 4 had created a false impression that the government intended to use more than Sh1 trillion in SACCO deposits to finance public infrastructure.

Kilemi framed the issue as one of ownership, governance and public confidence in the co-operative movement.

“For the avoidance of doubt, SACCO funds remain the property of the respective SACCOs and are managed exclusively by their elected officials,” Kilemi said.

The clarification followed remarks made during the Ushirika Day celebrations on July 4, where Deputy President Kithure Kindiki said the National Infrastructure Fund had secured Sh345 billion in seed capital from proceeds of the sale of Kenya Pipeline Company and Safaricom shares, according to the ministry statement.

Kilemi said the fund was intended to create fiscal space in the national budget by financing selected infrastructure projects, thereby freeing resources for priority sectors, including the co-operative movement.

“At no point did the Government propose using SACCO deposits for this purpose,” Kilemi said.

The denial touches on a sector that has become central to household savings, small enterprise financing and financial inclusion. SASRA said regulated SACCO assets stood at Sh1.156 trillion by September 2025, after the sector mobilised nearly Sh20 billion in deposits and disbursed more than Sh131 billion in loans between June and September 2025.

A 2026 FSD Kenya report, drawing from SACCO sector data, showed regulated SACCO assets rose to Sh1.08 trillion in 2024, while gross loans reached Sh845.11 billion and member deposits increased to Sh749.43 billion. Membership stood at 7.39 million.

Kilemi also sought to draw a firm operational boundary between government financing plans and SACCO member savings.

“The Government has no access to, and does not intend to utilize, member deposits held in SACCOs since Cooperatives are autonomous, member-owned institutions, and their funds are strictly used to provide affordable credit and other financial services to their members,” he said.

The ministry said inaccurate reporting on SACCO funds could undermine confidence in institutions that many Kenyans rely on for savings, affordable credit and economic empowerment.

It urged media houses to exercise due diligence and professionalism when reporting on the co-operative sector, saying the movement plays a critical role in Kenya’s socio-economic development.

The ministry further demanded that Nation Media Group retract the report, apologise and issue a corrective statement in the same manner as the broadcast it described as misleading.

The clarification comes as the government pushes broader reforms in the co-operative sector. During the 104th National Ushirika Day celebrations, Kindiki said the government aims to double co-operative membership from 14 million to more than 28 million through stronger institutions, modern legislation and public support.

The State Department for Co-operatives is mandated to promote co-operative growth through policy, standards, governance, audit services, savings and credit policy, legislation and support services. Its 2023 to 2027 strategic plan lists improved governance, increased access to affordable financial services and a stronger legal framework among its priority goals.