Impact of CoronaVirus on SACCOs

19 January, 2026 / Articles

SACCO’s make up approximately 5.55% of Kenya’s GDP as of 2018 according to the Kenya Financial Sector Stability Report 2018 by the Central Bank of Kenya. 

 

Furthermore, according to the SACCO subsector Demographic Study Report, 2019; The SACCO sub-sector has a total population of slightly over 4.97 million natural persons as well as corporate or institutional membership among the deposit-taking - SACCOs for the period ending December 2018.

 

Historically, a number of SACCOs have experienced challenges that have stunted the growth of the SACCO movements such as non-remittance of dues by employers, mismanagement of funds by officials, and failure of members to pay back their loans among others. However, the novel Coronavirus has taken unprecedented and most likely the largest test to the survival of SACCOs. In just two months, the effects of the pandemic are not only being felt in the healthcare sector across all sectors of the country’s economy. Sacco societies have not been spared.

 

So, what are some of the effects that co-operatives have experienced from the novel coronavirus?

 

Liquidity

 

The economic downturn after the first case was announced in Kenya has had a ripple effect on employment and businesses. Many employees have gone on unpaid leave or have been affected by pay-cut while many businesses have either recorded losses or have been completely shut down. This has resulted in many Sacco members withdrawing their savings to cater to their needs.

The Cooperative Alliance of Kenya has also urged Saccos to reconsider suspending interest on the loans taken by their members due to the economic downturn. As a result, this has affected the liquidity of Saccos.

 

Postponing the Annual General/Delegate Meetings

 

As is the norm for Sacco events, the first half of the year, the board members usually meet the Sacco members to discuss the performance of the Sacco in the concluded financial year. The ministry of Co-operatives, Industry, and Trade announced the indefinite postponement of AGM’s. The societies that were yet to do their AGMs paid their dividends nonetheless.

 

Increased Use of Online Services

 

The societies that had moved their services online are now leveraging on their investment as many members can access services at their convenience. There has been an increase in the use of online services as many people are encouraged to stay home to flatten the curve.

 

Need for Enhanced Risk Management

There is a need for Saccos to come up with effective risk management strategies to ensure that their financial resources are not affected in case of any unforeseen circumstance. The risks should be prioritized and practical plans to be made on how to deal with any arising circumstance.

 

In conclusion, despite the adverse effects witnessed from the novel coronavirus. SACCOs can still survive the pandemic by prioritizing their expenditure and cutting costs where they can. And for the SACCOs that are yet to leverage on technology, this is the ideal time to start.

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