Kenya’s KSh1.2 trillion SACCO sector is becoming a bigger battleground for banks and fintechs

SACCO payments in Kenya are becoming a bigger market for commercial banks, fintechs and other payment providers as deposit-taking SACCOs expand their digital services and transaction networks.

The competition is most visible in areas such as cheque processing, ATM connectivity and PesaLink, but the opportunity now extends into mobile money, agency banking, digital credit and the data generated by millions of member transactions.

The market is sizeable. Regulated SACCOs held KSh1.21 trillion in assets in 2025, up from KSh1.08 trillion a year earlier, while members’ deposits and savings rose to KSh832.74 billion from KSh749.43 billion. Gross loans and advances reached KSh948.67 billion, creating a large pool of financial activity around which banks and payment companies can build recurring transaction relationships.

That makes the SACCO sector more than a niche banking channel. As SACCOs digitise their services, the institutions providing the underlying payment connections gain access to transaction flows that run through savings, loan repayments, transfers, withdrawals and member payments.

SACCO growth creates a bigger payments opportunity

The digital side of the market is expanding alongside the balance sheet. According to the 2025 SACCO supervision data, the number of DT-SACCOs offering digital financial products rose from 236 in 2024 to 267 in 2025, while approved digital financial products increased from 345 to 407.

The change is important because it broadens the type of infrastructure SACCOs require. A SACCO offering mobile services, electronic transfers, digital credit or agency banking needs connections that allow its members to transact beyond the institution itself. That puts commercial banks and specialist payment providers in a position to supply the rails connecting SACCOs to the wider financial system.

Kenya’s broader banking market is already moving in that direction. Banks are investing in instant payments, API connections, digital onboarding and partnerships with fintechs rather than relying only on their own branch and account infrastructure. TechTrendsKE’s recent reporting on real-time payments found that PesaLink and upgrades to KEPSS are allowing banks, SACCOs, fintech wallets and other payment platforms to process transactions across institutions around the clock.

The same pattern is visible in commercial banking. I&M Bank, for example, is using digital onboarding, mobile-money connections, alternative data and fintech partnerships to expand its retail and SME business. About 25,000 customers open I&M accounts digitally each month, according to the bank, while its digital lending models draw on income proxies, credit-reference information and in-app behaviour.

For SACCOs, the implication is straightforward: the institution can retain the member relationship while relying on several external providers for the infrastructure behind that relationship.

Banks still dominate key infrastructure

Co-operative Bank remains the largest provider across several of the traditional payment connections used by DT-SACCOs.

The number of DT-SACCOs using Co-operative Bank for cheque issuance, settlement and clearance increased from 86 in 2024 to 92 in 2025. Family Bank followed with 22, up from 18, while KCB served 12 compared with 11 a year earlier. Equity Bank’s number rose from seven to eight.

The concentration reflects the historical relationship between commercial banks and the cooperative sector, but the direction of travel is broader diversification rather than a simple replacement of one provider by another.

Cheques also remain relevant despite the growth of electronic payments. They continue to serve some large-value and third-party transactions, which means the infrastructure supporting them retains commercial value. At the same time, the banks that already serve SACCOs have an opportunity to extend those relationships into newer payment channels.

ATM connectivity illustrates the same pattern. The share of DT-SACCOs with ATM connectivity fell from 64.97 percent in 2024 to 62.57 percent in 2025, yet Co-operative Bank remained the largest provider, with 110 DT-SACCOs using its platform. The decline in ATM penetration alongside growth in digital products suggests that SACCO technology adoption is not simply a matter of adding more channels; the mix of channels is changing.

Digital payments widen the competitive field

PesaLink is where the competitive picture becomes more interesting.

Co-operative Bank had 21 DT-SACCOs integrated with its PesaLink platform in 2025, compared with seven for Family Bank and four for NCBA. SASRA also identified Interswitch, Stanbic Bank, KCB Bank and Safaricom among newer providers of PesaLink services to DT-SACCOs.

That matters because real-time payments reduce the importance of traditional clearing infrastructure. A SACCO member can move money between institutions without the transaction necessarily remaining inside the SACCO’s own banking relationship.

Kenya’s wider payments market is already demonstrating how valuable that connectivity can become. Airtel Money’s share of the mobile-money market reached 11.1 percent in the quarter ended June 2026, while the company has expanded its links with banks including Absa and KCB. Its services now include bank-to-wallet, wallet-to-bank and cross-network transactions.

The result is a financial environment where customers increasingly expect different institutions to work together. For SACCOs, that creates room to select infrastructure providers according to cost, connectivity and functionality rather than relying on a single channel for every transaction.

The competition therefore extends beyond commercial banks. Mobile-money operators, payment processors and fintechs can participate in different layers of the transaction chain, whether through payment processing, wallet connectivity, merchant services or APIs.

SACCO data is becoming part of the wider financial system

Payments also generate another valuable asset: financial data.

The potential importance of SACCO data was illustrated by the government’s proposed expansion of credit assessment for repeat Hustler Fund borrowers. The proposal would examine financial behaviour across banks, SACCOs, digital lenders and other institutions, subject to consumer-led and consent-based information sharing arrangements.

That development places SACCOs inside a wider conversation about how financial information can move between institutions.

A member might save through a SACCO, borrow from it, receive money through M-PESA, maintain a bank account and use a digital lender. Each institution sees part of that financial picture. Connecting permitted information could give lenders a broader basis for assessing repayment behaviour, although the eventual data sources, scoring methodology and sharing rules will determine how such systems operate.

This is also where the strategies of banks such as I&M become relevant. The bank’s digital lending models use a combination of credit-reference information, income indicators and customer behaviour within its platform.

As more SACCO services move online, their transaction histories can become part of the same financial-data ecosystem, subject to the applicable consent, privacy and regulatory requirements.

Agency banking shows where transaction demand is growing

SACCO agency banking provides one of the clearest measures of how members are using these networks.

The number of SACCO agents rose from 4,247 in 2024 to 4,377 in 2025, with 42 SACCOs operating agency networks compared with 40 a year earlier. Transactions through those networks climbed from 7.68 million to 9.57 million, while their value increased from KSh31.64 billion to KSh37.07 billion.

Transaction volume therefore grew much faster than the agent base. That suggests existing networks were processing substantially more activity rather than growth coming mainly from a rapid expansion in physical outlets.

The broader mobile-money market shows a similar tension between digital usage and physical access. Kenya had 54.01 million mobile-money subscriptions by June 2026, while registered mobile-money agents fell from 602,470 to 568,463 during the quarter, according to Communications Authority data reported by TechTrendsKE.

For SACCOs, the lesson is that payment infrastructure is increasingly about transaction capacity and connectivity as much as physical distribution.

The infrastructure race is moving beyond traditional banking

The expansion of SACCO payments is taking place alongside a broader restructuring of Kenya’s financial technology market.

KCB’s acquisition of a 22.23 percent stake in Pesapal places the banking group closer to merchant payments, digital transactions and SME services, while its wider fintech strategy also includes Riverbank Solutions, which provides technology around agency banking, revenue collection, payments and business management.

Airtel Money is pursuing a similar partnership-led model from the mobile-money side. Its Kenyan business has linked up with banks and other partners while expanding merchant products, and the company has identified SACCOs as another potential area for partnerships around financial services.

The competitive field is also becoming regional. The Pan-African Payment and Settlement System has expanded its network to more than 30 African countries, connecting central banks, commercial banks, payment service providers and switches as it works to increase usage of its cross-border payment infrastructure.

SACCOs are not at the centre of every one of these developments, but they sit within the same infrastructure. As their digital products grow, they need systems that can connect members to banks, wallets, payment processors and other financial institutions.

That makes the competition around SACCO payments less about who processes a cheque or provides an ATM and more about who supplies the technology underneath an expanding financial relationship.

Co-operative Bank retains a substantial lead in several SACCO infrastructure categories, but the market around it is becoming broader. Family Bank, KCB, Equity, NCBA, Interswitch, Safaricom, Stanbic and other providers are competing across different parts of the payments stack, while the growth of digital financial products gives SACCOs more reasons to seek infrastructure that can connect them to Kenya’s wider digital economy.

For the banks and fintechs involved, the opportunity is the recurring flow of transactions generated by a KSh1.21 trillion sector. For SACCOs, the technology question is increasingly about how many financial services they can offer their members, how easily those services connect to the rest of the market, and which providers can deliver that infrastructure at scale.

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