Executives at Kenya’s savings and credit cooperative organizations (SACCOs) have named partnerships with financial technology firms as a top strategic priority for 2026, a shift industry leaders say reflects both surging digital transaction volumes and growing competition from banks and mobile-based lenders.
Digital transactions across the SACCO sector rose more than 14% in 2025, according to industry data discussed at the fourth annual Cooperative CEOs Roundtable held in Nairobi in late February, where more than 100 SACCO chief executives gathered to assess the sector’s technology strategy. Delegates said SACCOs need to modernize core banking systems, strengthen data-driven decision-making and adopt interoperable digital platforms that let members reach services across multiple channels, according to accounts of the discussion reported by local cooperative media.
Vincent Marangu, director of the cooperatives banking division at Co-operative Bank of Kenya, told the forum that “the technology landscape is evolving at an unprecedented pace,” and argued that continuous monitoring of the sector’s competitive environment had become a leadership obligation rather than an optional exercise. Participants at the roundtable committed to closer collaboration on shared digital infrastructure, cybersecurity resilience and staff training, according to the event’s organizers.
The push toward technology comes as SACCOs, long viewed as slower-moving alternatives to commercial banks, compete for members who increasingly expect mobile-first financial services. Kenya’s cooperative sector has traditionally drawn savers with dividend and deposit interest rates that outstrip those offered by conventional banks, but industry leaders say that advantage alone is no longer enough to retain younger and more digitally oriented members, particularly as mobile-money-linked lenders and bank-owned digital loan products have expanded aggressively over the past decade.
For much of that period, SACCOs operated largely outside Kenya’s National Payment System, the interbank settlement infrastructure that allows banks, telecom operators and licensed payment service providers to move money between one another in real time. Because most SACCOs have not been licensed as payment service providers in their own right, many have had to rely on partner banks to issue cards, settle transactions or connect members to mobile money rails, a dependency that has limited how quickly cooperatives could innovate independently. That gap has become a focal point of the sector’s current technology push.
In May 2025, EFT Corporation, an African payment solutions provider that says it supports more than 100 million end users and processes upwards of $33 billion in transactions annually across the continent, announced a partnership with several of Kenya’s leading SACCOs to co-create a shared digital payments platform. The initiative, unveiled at an industry gathering in Nairobi called EFT Connect: Kenya, is intended to give participating SACCOs real-time interoperability for transactions and a direct connection to the National Payment System, alongside shared agency banking, streamlined member onboarding and more efficient clearing and reconciliation. The platform is also expected to introduce SACCO-specific tools such as multi-wallet account structures and automated settlement mechanisms designed to scale across institutions of different sizes. Catherine Korsten, chief commercial officer at EFT Corporation, said the initiative was “about enabling SACCOs to take ownership of their digital future,” framing the project as a foundational layer meant to complement rather than replace SACCOs’ existing systems.
That ambition has already begun translating into concrete partnerships at individual institutions. In November 2025, Stima Sacco, one of Kenya’s largest cooperatives by asset base, announced an integration with Pesalink, the instant interbank payment network operated by Integrated Payment Services Limited, a subsidiary of the Kenya Bankers Association. The partnership makes Stima Sacco the first SACCO in Kenya to connect fully to a national instant payments platform, according to the companies, allowing roughly 220,000 members to send and receive transfers of up to 999,999 shillings directly between their SACCO accounts and any of the more than 80 banks, telcos and fintechs already linked to the Pesalink network. Stima Sacco chief executive Gamaliel Hassan described the move as more than a technology upgrade, saying it reflected “a commitment to inclusion” for members, businesses and informal savings groups, known locally as chamas, who rely on the cooperative for day-to-day financial transactions. Pesalink chief executive Gituku Kirika said the tie-up created Kenya’s first SACCO-to-bank instant payment ecosystem at scale, noting that the broader Pesalink network processed more than 1.1 trillion shillings across upwards of 8.2 million instant transactions in 2024 alone, with a switch uptime the company puts at 99.99%.
Prior to such integrations, transfers routed through older channels such as standard electronic funds transfers could take a full business day or longer to clear, particularly around weekends and public holidays, creating friction for members waiting on salary payments, business receipts or emergency funds. Instant payment rails have begun to close that gap, and cooperative sector figures say similar integrations are likely to spread to other large DT-SACCOs as the shared payments infrastructure championed by EFT Corporation and similar providers matures over the coming year.
The technology push also intersects with Kenya’s broader mobile money ecosystem, which has reshaped household finance since the launch of M-Pesa in 2007 and has since spawned a wide range of app-based lenders offering instant, algorithm-scored micro-loans without the membership structure, shareholding requirements or savings discipline associated with SACCOs. Cooperative leaders have generally framed these digital lenders as competitors for the same pool of borrowers, particularly younger, informally employed Kenyans who might otherwise be drawn into a SACCO’s more traditional savings-and-credit model. By investing in their own digital channels, industry executives argue, SACCOs can retain the appeal of member ownership and comparatively low loan pricing while matching the convenience that mobile-based lenders have made the default expectation for many borrowers.
Evidence of the sector’s growing reliance on data-driven lending is already visible in its loan books. According to SASRA’s first-quarter 2026 statistical and soundness report, credit disbursed to the healthcare sector grew 31.03% year-on-year to reach 2.79 billion shillings in March 2026, the fastest growth rate of any lending category tracked by the regulator. That outpaced growth in education loans, which expanded 27.12% over the same period, and lending for land and housing, which grew 18.01%. Land and housing nonetheless remained the largest recipients of SACCO credit in absolute terms, at 33.74 billion shillings, followed by education at 24.81 billion shillings, out of total sector lending of 115.73 billion shillings in the quarter. Healthcare lending had also grown steadily through 2025, according to the regulator, rising from roughly 2.13 billion shillings in March of that year to about 2.66 billion shillings by June, before accelerating further into 2026.
Analysts tracking the sector say the divergence between fast-growing niche categories such as healthcare lending and the still-dominant traditional categories of housing and education illustrates how SACCOs are beginning to use better data on member behavior to identify and price new lending opportunities, rather than relying solely on legacy salary-backed loan products that have historically formed the backbone of cooperative lending. As more transactions move onto digital and interoperable rails, SACCOs gain richer transaction-level data that can, in principle, support more sophisticated credit scoring and product design, mirroring approaches long used by commercial banks and mobile lenders.
Cybersecurity has emerged as a parallel concern as SACCOs open themselves up to broader digital connectivity. Roundtable participants in February specifically flagged cybersecurity resilience as an area requiring shared investment across the sector, reasoning that individual cooperatives, particularly smaller ones, are unlikely to be able to fund robust defenses on their own. Pooling resources through shared platforms and industry bodies is seen as a more realistic path to acceptable security standards than expecting thousands of independent SACCOs to build equivalent capabilities in isolation.
Regulators, for their part, have signaled openness to bringing more SACCOs formally into the National Payment System, though the process of licensing individual cooperatives as payment service providers remains slow relative to the pace at which digital transaction volumes are growing. Industry participants at the February roundtable argued that a shared platform model, in which a single licensed infrastructure provider connects multiple SACCOs to national payment rails, is likely to be a faster and less costly route to interoperability than expecting each cooperative to seek its own individual licensing and build proprietary connections. That shared-infrastructure approach mirrors how many smaller commercial banks and microfinance institutions have historically accessed national payment systems through correspondent relationships with larger, already-licensed institutions, rather than building direct connections themselves.
The stakes of getting this transition right extend beyond convenience. SACCO leaders have increasingly framed digital transformation as a matter of long-term survival for the cooperative model itself, rather than simply a customer-experience upgrade. Kenya’s banking sector has spent the past decade investing heavily in mobile and agency banking, narrowing the historical gap in convenience that once made SACCOs the default choice for members without easy access to a bank branch. At the same time, a proliferation of licensed and unlicensed digital lending apps has offered instant, uncollateralized loans to borrowers who might once have joined a SACCO specifically to access affordable credit, even though these apps frequently charge substantially higher effective interest rates than regulated cooperatives. Industry executives argue that SACCOs’ comparative advantage — member ownership, lower loan pricing and a savings culture reinforced by dividends — remains intact, but that this advantage will erode over time if cooperatives cannot also match the speed and convenience that digital-first competitors have made routine.
Cooperative sector observers also point to demographic pressure as a reason the fintech push has taken on urgency. Kenya’s SACCO membership base has historically skewed toward salaried, often older members recruited through workplace payroll deduction schemes in sectors such as teaching, policing and utilities. As those institutions look to recruit a new generation of members, including self-employed and gig-economy workers who may never set foot in a physical SACCO branch, executives say offering seamless digital onboarding and instant payments is no longer optional. Several SACCOs have already begun marketing digital-first membership products aimed explicitly at younger savers and small business owners, alongside their traditional payroll-based offerings, betting that convenience features such as instant transfers and mobile loan applications will do more to attract this cohort than dividend rates alone.
Whether the fintech push translates into a durable competitive edge will depend on execution, cooperative sector figures caution. Kenya’s SACCO movement includes both large, well-capitalized deposit-taking institutions with the scale to invest in new technology and thousands of smaller, non-deposit-taking societies that regulators say are already struggling to meet basic reporting requirements, let alone fund core banking upgrades or payment system integrations. How that gap between well-resourced and under-resourced cooperatives is bridged is likely to shape which institutions are best positioned to compete as digital finance becomes the default channel for Kenyan savers, and industry leaders acknowledge that the SACCOs left behind in this transition risk losing members to banks and fintech lenders even if their traditional dividend and interest rates remain competitive on paper.
