Treasury Dismisses Claims Government Will Use SACCO Savings to Finance National Infrastructure Fund

Treasury Dismisses Claims Government Will Use SACCO Savings to Finance National Infrastructure Fund

The National Treasury has firmly dismissed widespread claims circulating on social media that the government intends to borrow more than KSh1 trillion from Savings and Credit Cooperative Organisations (SACCOs) to finance infrastructure projects, describing the reports as false, misleading and designed to create unnecessary public anxiety.

The clarification comes amid growing public debate over the proposed National Infrastructure Fund (NIF) and ongoing reforms targeting Kenya’s cooperative movement, one of the country’s largest financial sectors with millions of members and deposits running into trillions of shillings.

In a statement issued on Monday, July 6, the Treasury rejected a viral graphic carrying the image of Treasury Cabinet Secretary John Mbadi, which falsely claimed that the government planned to tap into SACCO savings to finance roads and other national development projects.

The ministry maintained that neither the Cabinet Secretary nor the National Treasury had made such remarks.

<u>“We wish to clarify that the information circulating on social media regarding the Government borrowing SACCO savings for the National Infrastructure Fund is entirely FAKE and malicious,”</u> the Treasury said in its statement.

According to the ministry, the fabricated quote falsely alleged that the government intended to mobilise over KSh1 trillion from SACCO deposits through the forthcoming Cooperatives legislation to bankroll infrastructure development under the proposed National Infrastructure Fund.

Treasury warned that the misinformation appeared deliberately crafted to undermine public confidence in the cooperative sector and urged Kenyans to verify information through official government communication channels before sharing it online.

Cabinet Secretary John Mbadi also addressed the matter directly, describing the claims as fabricated and intended to trigger unnecessary public outrage.

“My attention has been drawn to some false information doing the rounds, claiming the Government intends to borrow money from SACCOs to fund projects through the National Infrastructure Fund. It’s maliciously choreographed to misinform the public, taint government and elicit public uproar,”Mbadi stated.

The clarification comes at a time when the government is pushing ahead with sweeping reforms of the cooperative sector through the proposed Kenya Cooperatives Bill and the Sacco Societies (Amendment) Bill, legislation expected to modernise governance, strengthen regulation and improve protection of members’ savings.

Government officials have previously said the reforms are intended to create a stronger legal framework for Kenya’s cooperative movement, which serves more than 14 million members and manages significant financial assets across the country.

Among the key proposals contained in the reforms is the establishment of a Deposit Insurance Fund aimed at protecting members’ savings should a SACCO become insolvent. The Bills also seek to improve governance standards, strengthen oversight, accelerate digital transformation and enhance transparency across the sector.

While public concern has largely centred on the National Infrastructure Fund, government officials insist the initiative will rely on alternative financing mechanisms rather than members’ deposits.

According to earlier government statements, the National Infrastructure Fund is expected to finance major development projects while reducing reliance on external borrowing and conventional budget allocations.

Officials have previously indicated that the fund will be supported through a combination of domestic resource mobilisation, Public-Private Partnerships (PPPs) and other approved financing models, although its structure continues to attract public debate.

Deputy President Kithure Kindiki recently explained that transferring eligible infrastructure projects to the fund would create additional fiscal space within the national budget, allowing the government to increase funding for priority sectors, including cooperatives.

“We are going to create a bit of fiscal space in the budget by offloading some of the projects that are budgeted for… and therefore we will have a little more leeway and fiscal space to fund key sectors, including the cooperatives sector,” Kindiki said during the 104th Ushirika Day celebrations.

His remarks were interpreted by some as an indication that additional public resources could be directed toward strengthening SACCOs through improved financing, technology adoption and regulatory reforms rather than drawing funds from members’ savings.

The Treasury’s latest clarification is expected to reassure millions of SACCO members who had expressed concern following the viral claims. It also highlights the increasing challenge government agencies face in countering misinformation on social media, particularly on matters involving public finance and savings.

As Parliament continues considering the proposed cooperative reforms, officials have reiterated that any changes affecting SACCO operations will follow established legal processes and public participation requirements, while urging Kenyans to rely on verified information from official government sources.

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Treasury Dismisses Claims Government Will Use SACCO Savings to Finance National Infrastructure Fund