Muranga Sacco Warns Global Tensions Impact

A Murang’a-based savings and credit cooperative has raised concerns that escalating tensions involving the US, Israel and Iran could have far-reaching effects on its financial performance.

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Amica Sacco said the uncertainty surrounding the conflict could disrupt key income streams, particularly for members engaged in micro, small and medium enterprises, as well as tea and coffee farming.

Speaking during the Sacco’s Annual General Meeting on Tuesday, CEO James Mbui cautioned that prolonged geopolitical instability may weaken export markets relied upon by local producers.

“Our members depend heavily on tea and coffee exports, some of which go to markets that may be affected by the conflict,” he said.

Mbui noted that any disruption in international markets is likely to reduce farmers’ earnings, with ripple effects on savings and loan repayments within the Sacco.

He further warned that geopolitical tensions often trigger increases in global fuel prices, which in turn push up production and transport costs and eat into farmers’ profit margins.

The CEO urged the government to consider interventions that can cushion financial institutions and their members against external economic shocks.

He pointed out that tea and coffee farmers are already grappling with price volatility and unpredictable weather patterns, making them particularly vulnerable to global disruptions.

“These dynamics inevitably influence members’ saving patterns, borrowing behaviour and repayment capacity,” Mbui said, adding that financial institutions must remain cautious in such an environment.

Despite the concerns, the Sacco reported strong financial performance in 2025, demonstrating resilience amid a mixed economic landscape.

Deposits grew significantly by more than Sh1.34 billion during the year, while the loan book expanded to Sh9.23 billion. Revenue also rose to Sh1.59 billion, reflecting steady growth.

Kenya’s economy maintained relative stability in 2025, expanding by about five per cent, largely supported by agriculture, financial services and transport.

Inflation remained within the Central Bank of Kenya’s target range of four to five per cent, offering some predictability for households and businesses, although high lending rates continued to limit access to credit.

Agriculture recorded moderate gains, aided by improved weather conditions in some regions, which boosted crop and dairy production.

However, the tea and coffee subsectors continued to face instability due to fluctuating global prices and climate variability, factors that directly affect Sacco members’ incomes.

Mbui emphasised that Saccos must adapt to these realities by strengthening internal controls and maintaining prudent lending practices.

“In this environment, Saccos like ours must remain prudent in lending, strengthen risk management and continue supporting members through reliable financial services,” he said.

Since its rebrand in 2016, Amica Sacco has recorded steady growth across key indicators. Its asset base rose from Sh2.89 billion to Sh10.78 billion by 2025, while deposits increased to more than Sh8 billion.

The institution also moved from a net loss position to posting a surplus of Sh272 million, highlighting improved operational efficiency.

Membership has also expanded steadily over the years, rising from 199,460 members in 2016 to 211,935 in 2025, with 12,475 new members joining in 2025 alone.

A major driver of this growth has been sustained investment in digital transformation.

Over the past decade, the Sacco has shifted from largely manual operations to technology-driven systems, enhancing efficiency and accessibility for members.

Currently, digital platforms account for the majority of transactions, significantly improving service delivery and allowing members to access financial services with ease while increasing transaction volumes.

As digital adoption grows, the Sacco has also prioritised security enhancements.

The introduction of biometric verification is among measures aimed at safeguarding member data and deposits in an increasingly digital environment.

To support members facing financial strain, Mbui assured members that the Sacco is willing to restructure loans where necessary, helping borrowers remain afloat during difficult economic periods.