Gideon Gitonga: Proposed sacco law solid for financial vibrancy in Kenya

Gitonga arrived at the Sacco’s founding with little capital but a clear mission: create quick, reliable access to salary advances and short-term credit for members of Karura Community Chapel.

Alongside chairman Epainito Chahale, he set out in 2017 to build an institution rooted in accountability, service, and community trust.

At launch, the Sacco numbered just 50 founding members. Today, it serves more than 5,000 members locally and in the diaspora.

The man at the helm blends technical expertise with a personal ethic forged at home.

Gitonga,a family man who says he leans on faith and the example of his mother, is described by colleagues as honest and steady.

His credentials reflect a deep grounding in finance: CPA, CISA, a BA in Public Administration, and a master’s in Commerce (finance and investments), with CFA studies underway. He is active in ICPAK and ISACA and brings professional discipline to cooperative governance.

Under his leadership, Karura Community Sacco’s balance sheet has transformed. From startup assets of about Sh1 million, the Sacco reported Sh501 million in total assets last year.

 Revenue surged to nearly Sh74 million, growth management attributes to stronger member confidence and an expanded product suite.

Stable dividend rates of eight per cent on shares and up to 15 per cent on deposits translated into larger actual payouts simply because the asset base grew.

Portfolio quality has also improved. Non-performing loans have fallen from 19.5 per cent to 9.5 per cent, a result Gitonga attributes to tighter credit monitoring and a move toward collateral-backed lending.

Collateralized loans now make up roughly 85 per cent of the loan book, reflecting broader sector shifts away from guarantor-based models toward more flexible security arrangements.

Gitonga views Karura’s rise as part of a larger Sacco movement that remains one of Kenya’s most effective engines for financial inclusion and grassroots wealth creation.

Yet he warns that sustainability depends on stronger regulation, consolidation and modernisation.

He is a vocal supporter of the Sacco Societies (Amendment) Bill, 2025, which proposes secondary Saccos for shared services, a Central Liquidity Facility, and operationalization of a Deposit Guarantee Fund.

It seeks to amend the Sacco Societies Act, Cap. 490B, primarily to provide for the establishment of secondary SACCO societies for central liquidity and shared services business, and to facilitate the operationalization of the Deposit Guarantee Fund.

The Bill, received by the National Assembly in July last year, introduces significant changes aimed at strengthening the stability, regulation, and protection within the SACCO sector.

“These proposals encourage consolidation within the sector, including mergers and a temporary moratorium on new SACCO registrations to address fragmentation, and regulated SACCOs may be rebranded as ‘credit unions’ to align with global standards and distinguish them from informal entities,’’ Gitonga says.

One of the key proposals is the introduction of a shared services framework.

Gitonga, a vocal voice in the push for reforms in the sector, says that this will allow Saccos to pool resources, collaborate on various services, and adopt shared technological infrastructure.

According to him, the model is designed to reduce operational costs, promote innovation, and help smaller SACCOS achieve economies of scale while maintaining their independence.

The draft law also proposes the establishment of a Central Liquidity Facility, providing short-term financing to SACCOs experiencing temporary liquidity challenges.

“More significantly, it will enable SACCOs to participate directly in the national payment system, ensuring smoother inter-SACCO transactions and faster response to members’ financial needs. This facility is also expected to strengthen the overall resilience of the SACCO sector.”

The reforms emphasize the adoption of ICT-based regulatory reporting. By leveraging technology, Gitonga says that those entities will be able to achieve faster, more accurate, and efficient reporting. This approach is expected to improve oversight while easing compliance burdens.

He adds that the shift to ICT-based reporting will simplify regulatory compliance, freeing up Saccos to focus on innovation and service delivery rather than administrative requirements.

“If enacted, the proposed law will mark a significant milestone in the evolution of Kenya’s cooperative financial sector.”

“By modernizing operations, introducing collaborative frameworks, and ensuring constitutional alignment, the Bill positions SACCOs for sustainable growth. The reforms not only strengthen financial resilience but also reinforce the role of SACCOs as vital drivers of financial inclusion and empowerment in Kenya.”

The national picture underscores his point: Kenya has over 13,000 registered Saccos, but only 355 are SASRA-regulated — yet those regulated entities control about 85 per cent of sector assets, roughly Sh1 trillion, and serve some 7.4 million members.

For Gitonga, reform is not just desirable but necessary if the movement is to scale responsibly.

Beyond the Sacco, Gitonga is an entrepreneur in asset financing and a mentor to young men entering financial leadership.

He cites several mentors — notably the late Frank Ireri of HF Group — whose example of diversification and strategic restructuring shaped his approach to building resilient financial institutions.

From a modest chapel savings group to a robust cooperative with a global membership, Karura Community Sacco’s trajectory today is a testament to disciplined governance, strategic reform, and the kind of community-minded leadership Gideon Gitonga personifies.