Tanzania's Sh1.7 trillion Saccos sector faces test of turning savings into livelihoods

Tanzania's savings and credit cooperative societies (Saccos) have grown significantly, with assets worth Sh1.69 trillion at the end of 2025, representing a 15.8 percent increase. The sector comprised 981 licensed Saccos serving approximately 1.9 million members and beneficiaries. This growth highlights the sector's increasing importance in mobilising domestic savings and extending financial services beyond conventional banking.

However, the sector faces challenges, including rising loan defaults and weak capitalisation. Average non-performing loans stood at 8.1 percent, exceeding the five percent regulatory benchmark. Additionally, 90 societies were identified as undercapitalised and requiring intervention. These concerns raise questions about the sector's sustainability and the need for stronger management and accountability.

The Tanzania Cooperative Development Commission (TCDC) reported that outstanding loans reached Sh1.41 trillion, while members' savings and deposits stood at Sh1.22 trillion. The figures highlight the need for stronger management and accountability to ensure financial growth translates into meaningful economic opportunities for members.

At the 58th Annual General Meeting of Bandarini Saccos Limited in Dar es Salaam, leaders were urged to safeguard members' contributions through transparency and responsible management. Dar es Salaam Regional Commissioner Albert Chalamila called on the society's leadership to prioritise accountability and prudent management of members' funds.

Bandarini Saccos Board Chairman Ernest Nyambo presented the society's performance and outlined measures to address existing challenges. The society's assets increased from Sh31.35 billion in 2025 to Sh37.18 billion by September 2026, while membership rose from 2,078 to 2,569. Members' savings grew to Sh24.40 billion from Sh21.34 billion.

Prime Minister Mwigulu Nchemba called for cooperative savings to be channelled into agriculture, livestock, fisheries, manufacturing, trade and small businesses. He highlighted Saccos' potential to support enterprise development and job creation rather than concentrating lending on personal consumption.

The sector's next phase of growth will depend on its ability to safeguard members' trust, improve loan recovery, strengthen capitalisation and channel more resources into productive investments. Deputy Finance Minister Mshamu Ali Munde urged Hazina Saccos to strengthen internal audits, loan controls and recovery systems, stressing the need to protect members' funds.

Key points

• The sector's growth and sustainability depend on addressing challenges such as loan defaults and weak capitalisation.
• Saccos have the potential to support enterprise development and job creation by channeling savings into productive economic activities.
• Strengthening management and accountability is crucial to ensure financial growth translates into meaningful economic opportunities for members.