SACCOs on the fault line

Hi 👋🏽 It's Brian from The Kenyan Wall Street.

In today's newsletter, the SACCOs regulator has noted that the sector is growing; but without resolving its underperforming loan book, the credit boom it has enhanced could jeopardize the gains.

These are our top business stories today…

SACCOs On the Fault line 

By Brian Nzomo

Kenyan SACCOs are expanding rapidly, but the growth comes with a cautionary note: loans are outpacing deposits, leaving institutions stretched. For every KSh 100 in member savings, SACCOs are now lending roughly KSh 115, a level that raises the risk of liquidity stress if withdrawals surge or incomes falter. Non-performing loans remain stubbornly above 7%, signaling that credit quality hasn’t kept pace with balance-sheet growth. Much of this lending flows into land, housing, and education; sectors that stabilize households but do little to boost wider economic productivity. While capital buffers remain strong for now, the narrow margin for error hints at potential vulnerabilities if defaults persist.

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From Junk to Gold

By Fred Obura

Kenya is eyeing a multibillion-shilling opportunity in vehicle recycling with its proposed National Automotive Industry Development Bill, 2025, aiming to turn decommissioned cars into spare parts and steel for local manufacturers. With roughly 30,000 written-off vehicles sitting idle, the legislation seeks to formalize end-of-life vehicle management and inject them back into the economy. Policymakers hope the move will create jobs, support small businesses, and reduce environmental waste, marking a shift toward a circular automotive economy. By linking sustainability with economic incentives, Kenya aims to transform what was once waste into a regulated engine for growth.

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The Twist of Fate

By Brian Nzomo

When a marketing firm demanded KSh 76 million from Garden City Mall for what it called an abrupt and costly termination of their advertising contract, the courtroom drama took an unexpectedly ironic turn. The High Court acknowledged that the mall had indeed breached the agreement by evicting JohnGray Communications’ staff without notice, but the firm’s sprawling claim collapsed under the weight of missing invoices, absent receipts, and unverified client payments. What had begun as a fight for lost revenue became a reckoning in which the very records the company relied upon were used against it, leaving JohnGray on the hook for millions it now has to pay the mall. In the end, a dispute over millions concluded with literary justice: the plaintiff emerged not victorious, but indebted.

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