Cooperatives have emerged as the second most preferred homeownership loans among Kenyans.

The latest Housing Survey Report by Kenya National Bureau of Statistics says Kenya’s homeownership trends have shifted, with a strong preference for Saccos and commercial banks as primary modes of acquiring homes.

According to the report, 34.1 per cent of Kenyans used Saccos as an avenue to acquire property during the years 2023 and 2024.

Despite experiencing a slight dip in the proportion of loans for the land and housing sectors in the past couple of years, Saccos continue to experience positive contributions from its members.  This highlights the confidence and dependability that Kenyans place on Saccos in their pursuit of home ownership.

For many individuals, this new shift is largely attributed to favourable terms offered by saccos such as lower loan interest rates.  According to data from the World Bank, most Saccos in Kenya provide a fixed interest rate that is typically below 12 per cent and on a reducing balance.

This is unlike commercial banks whose interest rates can change depending on signals from the Central Bank of Kenya (CBK).  For instance, a higher signal from the central bank will likely cause an increase in interest rates on customer loans.

More notably, most Sacco development loans offer long-term repayment options for borrowers, spreading the repayment burden. This makes it a more logical option for individuals compared to traditional commercial bank loans. Saccos have also become increasingly favoured for loan applications due to their straightforward application process and rapid approval times, rendering them an accessible lending option for members.

The loan approval process is often less bureaucratic, and member-focused as opposed to commercial banks which involve strict credit checks and collateral requirements that often hinder individuals from accessing loans.

 “I’ve been saving in two Saccos for the past five years. This year, I’m looking to apply for a loan to facilitate the purchase of land and construction of my retirement home. I prefer saving in Saccos because they are more favourable and flexible compared to my bank,” says 50-year-old Jane Kemunto, a registered member of the Bandari and Nacico saccos.