Young people are borrowing more than saving, says cooperative boss

Like many young Kenyans, 27-year-old Brian Mwangi dreams of owning a home, expanding his small online business and securing a stable future.

But unlike his parents, who built their lives through a Savings and Credit Cooperative (Sacco), Mwangi has never considered joining one.

"I always thought Saccos were for older people with permanent jobs," he said. "Most of us prefer mobile loan apps because the money comes instantly, even though the interest is high. Nobody has really explained how a Sacco can help someone my age."

As Kenya prepares to celebrate the 104th Ushirika Day on July 4, cooperative leaders are making a passionate appeal to young people to embrace Saccos and cooperatives, warning that the future of one of the country's strongest economic pillars depends on the next generation.

According to Daniel Marube, Chief Executive Officer of the Cooperative Alliance of Kenya (CAK), the country has one of the youngest populations in Africa, yet the cooperative movement is largely led by older generations.

"When you look at our demographic statistics, our average age is about 18 or 19 years, meaning more than 80 per cent of our population is youthful. Yet the average age of cooperative leaders is around 55 years," said Marube.

He noted that while older members have spent decades building wealth through savings, investments and cooperative enterprises, very few young people are joining Saccos to learn the principles of saving and wealth creation.

Marube expressed concern that as millions of older members continue to accumulate assets through cooperatives, many young people are missing the opportunity to develop the financial discipline and savings culture needed to inherit, preserve and grow that wealth.

"Our concern is who will take over these vibrant cooperatives in the next 15 or 20 years. Parents will eventually pass on the wealth they have built to their children, but are the youth prepared to preserve it and make it grow?" he posed.

The cooperative movement remains one of Kenya's biggest drivers of financial inclusion. According to the State Department for Cooperatives, Kenya has more than 15 million cooperative members and over 30,000 registered cooperative societies.

The sector contributes about 45 per cent of the country's Gross Domestic Product (GDP) directly and indirectly, making it one of Africa's most vibrant cooperative movements.

Similarly, the Sacco Societies Regulatory Authority (SASRA) reports that deposit-taking Saccos manage assets worth more than KSh1 trillion, highlighting the critical role they play in mobilising savings and providing affordable credit to millions of Kenyans.

Yet despite this success, youth participation remains low.

Marube estimates that young people occupy only about five per cent of leadership positions in agricultural cooperatives and large Saccos.

"The older generation are the biggest savers. If they withdrew all their savings today, many Saccos would experience a serious financial crisis. Young people are borrowing more than they are saving, and that culture must change," he said.

He attributed the low uptake to changing attitudes among the youth, many of whom prefer quick digital loans instead of long-term saving.

"Many young people want instant solutions. They can access money through a mobile app within minutes, so they see Saccos as slow or designed for older people. But saving consistently is what builds lasting wealth," he explained.

To attract younger members, Marube said many Saccos are now simplifying registration through digital platforms, allowing prospective members to open accounts using their mobile phones and submit documents later. Others are introducing products specifically designed for young entrepreneurs, students and informal sector workers.

Mwangi said such reforms could make a difference. "If joining becomes easier and we understand the benefits, I think many young people would be willing to save through Saccos instead of depending on expensive digital loans," he said. "We need financial education as much as we need access to money."

Marube urged young people not to wait until their parents’ hand over their wealth before embracing the cooperative movement.

"Join a Sacco today, develop a culture of saving, build your own investments and prepare yourselves to become the next generation of cooperative leaders," he said.

With Kenya's youthful population expected to play a pivotal role in driving the country's future economic growth, cooperative leaders say the time for young people to secure their financial future is now, not tomorrow.