This clustering is principally informed by the applicable legal framework that governs the supervision of cooperative enterprises. There are two legal and regulatory frameworks governing cooperative enterprises in Kenya: the Cooperative Societies Act and the Sacco Societies Act. Apart from DT-SACCOs, and the specified Non-WDT-SACCOs which are subject to the dual regulatory framework of both the Cooperative Societies Act and the Sacco Societies Act; all other co-operatives are subject only to the supervisory regime of the Co-operative Societies Act. The key difference between the two legal regimes is that the Sacco Societies Act is a specialized legislation dealing mainly with prudential regulation of the SACCOs, and addresses issues concerning the financial soundness, stability, and safety of the SACCOs; as well as market conduct of business issues to protect consumers of SACCO financial services.
The Sacco Societies Act is thus designed as a business regulation statute concerned with the risks inherent or associated with SACCO business as defined therein. On the other hand, the Co-operative Societies Act is a general registration, incorporation and supervisory statute applicable to governance and general operations of all co-operative enterprises. It does not acknowledge or address the unique businesses that co-operative enterprises may engage in or the risks that those businesses may portend to consumers. Its main concern is the incorporation of a co-operative enterprise as a legal entity. SOURCE: SASRA
