Stiff SACCO rules the Jubilee Govt is set to unveil for client protection

All non-deposit taking savings and credit cooperative organisations might soon be required to have an asset base of at least Sh200 million before being registered by Commissioner for Cooperative Development. 

The proposal made by Industry and Cooperatives Cabinet Secretary Peter Munya has, however,  been opposed by cooperative movement leaders.

Under the umbrella of Kenya Union of Savings and Credit Cooperatives, they said the requirement is too stiff for the no-deposit taking saccos, most of which are located in counties.

The leaders who spoke during a stakeholders’ forum in Nairobi yesterday said the asset base should be put at Sh100 million. 

The suggestion by Munya comes at a time when tighter regulations are being planned to protect savers affiliated to the thousands of non-deposit saccos from fraud and illegal business dealings.

Speaking during the forum, the CS said lack of strong rules to manage societies not controlled by Sacco Societies Regulatory Authority (Sasra) is to blame for the high cases of racket which has cost a majority of members their deposits.

He said for a long time non-DT saccos have not been regulated despite receiving cash from members. “The absence of the same has led to scam incidences as few individuals have been using the institutions as avenues to swindle Kenyans their hard-earned sweat,” said Munya.

“Equally management of the saccos has been diverting members’ deposits to other uses,” he told participants at the forum for validation of the draft regulations for specified non-deposit taking saccos businesses in Kenya at a Nairobi hotel.  

Insufficient capacity

Devolved governments, the meeting heard, lack capacity to supervise and audit cooperatives after their functions were transferred from national government through the Commissioner for Cooperatives. 

Cooperative leaders said counties have no staff with technical skills to supervise and audit saccos, and where these skills exist, the department is not well funded to handle the functions.

Co-operative Alliance of Kenya Executive Director Daniel Marube said a draft co-operative policy is ready and is being validated by county governments and other stakeholders.

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