Despite disruption in the finance sector in Kenya, the country remains a global trailblazer. Saccos, banks, and fintechs are leading, not following. But to survive—let alone thrive—they must recognize that the sector has expanded to include telcos and fintechs. The sands are shifting.
The Sacco struggle: growth without resilience
Contrary to popular belief, the Sacco sector is not shrinking—but it is fragile. Total assets crossed KSh 1 trillion in 2024, and membership grew to 7.39 million. But this growth masks deep structural problems.
First, the wealth is concentrated. Just 60 Saccos control over 77% of the sector’s assets. Meanwhile, 75.53% of all deposits are held in just 4.32% of accounts. The sector’s liquidity depends on a narrow pool of wealthy savers.
Second, the sector is in crisis. A year-long moratorium on new registrations was imposed after governance failures, including the KUSCCO crisis that saw Sh14 billion lost. Non-performing loans have risen above regulatory limits.
Third, the “socialism” has not protected Saccos—it has slowed them. The movement’s conservative roots created a culture resistant to change. As of 2023, 346 Saccos had no digital channels at all. The sector was overtaken by M-Shwari, Fuliza, and now Ziidi—all built on the Sacco model but without the Sacco baggage.
The reform agenda is now urgent. Proposals include a Deposit Guarantee Fund, Central Liquidity Fund, and rebranding as “credit unions” . Whether these reforms succeed will determine whether Saccos remain a cornerstone of Vision 2030—or become a cautionary tale.
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Disruption in finance: The rise of AI-powered financial ecosystems
The competitive landscape has been transformed by AI and platform convergence. Safaricom’s launch of My OneApp—an AI-powered platform merging M-PESA and MySafaricom—marks a significant shift. The app serves over 6.5 million 30-day active users and hosts more than 80 mini-applications. It uses AI to learn user behaviour, personalizing the experience based on transaction frequency and preferred contacts.
Safaricom describes this as “FinTech 2.0,” with an architecture supporting up to 6,000 transactions per second, up from roughly 100 in earlier years. The platform embeds financial services directly into the customer journey—investments, lending, bill payments—all from a single dashboard. This is the new standard.
Ziidi: from savings to stock trading in one platform
Perhaps the clearest example of this convergence is Ziidi, Safaricom’s investment platform embedded within the M-PESA ecosystem. What began as a money market fund has evolved into a comprehensive wealth management suite.
Ziidi MMF launched in late 2024 and was officially unveiled in March 2025 as M-PESA celebrated its 18th anniversary. The thinking was simple: with Ziidi, all one needs to start investing is KSh 100 and a mobile phone.
The results have been remarkable. By mid-2026, Ziidi MMF had attracted approximately 7.7 million opt-ins, with 2.42 million active investors and assets under management worth nearly KSh 19.8 billion. A Shariah-compliant variant, Ziidi Shariah, drew 836,000 opt-ins and over 102,000 active investors .
Then came Ziidi Trader. Launched in February 2026 in partnership with the Nairobi Securities Exchange, it allows M-PESA users to buy and sell listed shares directly from their phones—without a traditional brokerage account or CDS account. [President William Ruto, who officiated the launch, described it as “a decisive turning point” that would “democratize capital markets.”
The uptake has been significant. By mid-2026, Ziidi Trader had recorded about 688,000 opt-ins and over 103,000 active traders. The platform facilitated roughly 533,000 trades involving 171 million shares valued at KSh 1.9 billion.
Safaricom has also introduced Ziidi Pochi, a digital savings product targeting low-value savers, which recorded 1.46 million opt-ins and assets under management totaling KSh 318 million .
The Ziidi ecosystem is not just a product line—it represents a strategic shift. As one analysis noted, Safaricom is positioning itself as a direct competitor to traditional wealth managers. A single platform now handles payments, savings, investments, insurance, and stock trading. The walls between financial services are dissolving.
Banks are going fully digital
Kenya’s tier-1 banks have largely completed the migration to digital channels. I&M Bank recently disclosed that 98% of its customers now transact digitally. Equity Group reports over 95% of transactions processed through digital channels, and KCB has reported similar levels. The shift from branch banking to digital is largely complete. The new competition is about share of wallet—generating more revenue from customers who are already fully digital.
I&M’s non-interest income rose 31% to KES 14.4 billion, while assets under management surged 223% to KES 99 billion as the bank pushed wealth products to its existing base. Banks are turning their apps into financial marketplaces, bundling lending, savings, insurance, and payments into one place.
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The Fuliza phenomenon: digital credit at scale
Perhaps no single product illustrates the scale of disruption better than Fuliza. Safaricom’s mobile overdraft facility disbursed KSh 1.46 trillion in the year to March 2026, a 49.3% increase from the previous year. The service reached 17.7 million distinct customers—more than double the previous year.
But the data reveals a troubling trend: a significant portion of this borrowing is for survival, not investment. NCBA Group MD John Gachora noted: “There has been less borrowing for capital expenditure. We are seeing more borrowing just for survival. People are borrowing to spend on short-term needs as opposed to long-term investments.” This is the reality of digital credit in Kenya: accessible, instant, and increasingly used for basic needs.
Disruption in finance: Fintechs and Saccos must also adapt
Fintechs themselves are not immune. With low barriers to entry, intense competition, and rapidly evolving technology, fintechs must continue to innovate or risk being overtaken. A decade ago, starting a fintech required significant capital. Today, a laptop, coding knowledge, and an internet connection can be enough.
For Saccos, the path forward is clear. Harambee Sacco, with 84,000 members, is diversifying beyond conventional offerings to tap into youth and MSME markets. It is targeting an asset base of KSh 80 billion and membership of 350,000 by 2030, leveraging technology and establishing a youth directorate. This is the kind of strategic shift the sector needs.
The Data Revolution in credit
The next frontier is data. Industry players now speak of “data as the new collateral.” SMEs—small traders, boda boda operators, barbers—may not own traditional collateral, but their daily transactions generate valuable data. This information can help lenders assess creditworthiness and expand access. AI-powered credit scoring is already demonstrating results. Digital lending portfolios have recorded significantly lower levels of non-performing loans compared to traditional channels.
Banks are also exploring AI-powered early warning systems. The proposed “Smart Delinquency Predictor” would analyze payment histories and market trends to flag high-risk accounts up to six months in advance, allowing lenders to intervene before loans sour. Kenya would become the first African country to deploy such a platform for non-performing loan management.
What’s new? The rules are still being written
The regulatory environment is also shifting. A proposed 16% VAT on mobile money transaction fees has drawn pushback from the Kenya Bankers Association, which warns it could drive consumers back to cash and undermine financial inclusion. The Finance Bill 2026 represents a significant gamble—one that could reshape the economics of digital finance in Kenya.
Meanwhile, the Sacco sector remains locked out of the National Payments System and lacks an inter-lending facility. A deposit guarantee fund is still not in place, leaving members exposed. These structural gaps must be addressed if Saccos are to compete effectively.
Disruption in finance: the bottom line
What does all this mean? That exciting and turbulent times still lie ahead. Saccos, banks, and fintechs cannot sit on their laurels. The disruption in the finance sector is not a one-time event—it is a continuous process.
Those who adapt will thrive. Those who cling to “this is how we’ve always done it” will find themselves on shifting sands, watching the future pass them by.
You may also want to read, Are Kenyan banks too big to fail?
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