The government's clarifications followed a wide public outcry. The cooperatives have received numerous calls from depositors concerned about the safety of their funds. Rumors that the government could gain access to the nearly 1 KSh trillion held in SACCO caused panic, with many depositors threatening to withdraw their savings. However, government representatives and leaders of the cooperative sector have stated that there are currently no plans to use deposits from cooperative members.
The Ministry explained why SACCO deposits cannot be used for government financing. In an interview with NTV, Patrick Kibiru Kilemi, Chief Secretary of the Ministry of Cooperatives and Development of Micro, Small and Medium Enterprises (MSME), stressed that SACCO does not keep deposits in the form of «dead» capital. «In matters of financial intermediation, our SACCO works 100%. This means that we do not keep deposits without movement. All funds are provided in the form of loans. The ratio is almost one to one», said Patrick Kilemi. The ministry explained that SACCO deposits are not readily available for public investment, as cooperatives mobilize members' savings and immediately lend them to those who need it.
Industry leaders also tried to reassure depositors, noting that most of the funds are circulating in the economy. Access to this money would require the withdrawal of loans already extended to citizens and businesses across the country. According to industry representatives, all savings are currently protected by the current legislation on the cooperative and financial sectors.
The National Treasury also denied the rumors spread on social media. On July 6, Finance Minister John Mbadi said that no such statements had been made and urged Kenyans to ignore false information, trusting only official communication channels.
Although the government has ruled out the immediate use of SACCO deposits, officials noted that the participation of cooperatives in infrastructure projects in the future is not excluded when creating an appropriate legal framework. The leaders of the sector cited the experience of Canada, the United States and Europe, where large cooperatives act as institutional investors. However, they stressed that any future participation would be voluntary and based on investment interests rather than government directives.
The discussion also drew attention to the proposed bill on amendments to the SACCO Act. The reforms are aimed at modernizing the sector, increasing efficiency and financial stability. Among the proposals are the creation of a Central Liquidity Mechanism that will allow cooperatives to support each other, and a system of shared services to reduce operating costs. In addition, the reforms are aimed at strengthening the Deposit Guarantee Fund to increase savings protection and confidence in the sector.
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