Savings and Credit Cooperative Organisations (SACCOs) are set to receive increased government support under plans to use the National Infrastructure Fund (NIF) to create more fiscal space for key sectors.
Speaking during the 104th Ushirika Day celebrations at Uhuru Park, Deputy President Kithure Kindiki said the government intends to finance eligible infrastructure projects through the National Infrastructure Fund, freeing up resources in the national budget for sectors such as cooperatives.
“We are going to create a bit of fiscal space in the budget by offloading some of the projects that can now be funded by the National Infrastructure Fund. Therefore, we will have a little more leeway to fund key sectors, including the cooperatives sector,” Kindiki said.
The Deputy President revealed that the government has already begun operationalising the fund, which has accumulated KSh345 billion in seed capital generated from the sale of selected state assets.
SACCO reforms set to benefit
The additional funding comes as the government moves to strengthen Kenya’s cooperative sector through the Sacco Societies (Amendment) Bill, 2025, which is expected to be signed into law by President William Ruto within the coming weeks.
If enacted, the law will introduce several reforms aimed at improving governance, protecting members’ savings and restoring public confidence in SACCOs.
Among the key proposals is the establishment of a Deposit Insurance Fund, which will compensate members if a SACCO collapses.
Compensation will be calculated after deducting outstanding loans, liabilities and loan guarantee obligations from a member’s protected deposits.
Although the Bill proposes a compensation limit of KSh100,000, some lawmakers have argued that the amount is too low and could leave members with larger savings exposed to significant financial losses.
Digital transformation
The government also expects additional funding to accelerate the digital transformation of SACCOs.
Resources from the National Infrastructure Fund could help finance shared technology platforms that would allow smaller cooperatives to modernise their operations, improve regulatory compliance and lower operating costs.
The proposed digital systems are expected to reduce disparities in technological capacity across the sector while enhancing efficiency and service delivery.
NIF continues to attract scrutiny
Despite the government’s optimism, the National Infrastructure Fund has continued to face criticism over its funding model.
Some stakeholders have questioned the decision to finance the fund through the sale of profitable state-owned assets, arguing that the move could reduce future government revenue.
Civil society organisations and opposition leaders have also expressed concerns about governance, transparency and the possibility that the fund could be used to finance politically motivated projects.
However, the government maintains that the fund will provide a sustainable financing mechanism for major infrastructure projects while creating room in the national budget to support priority sectors such as cooperatives, agriculture and social development.
