In an effort to enhance the Sacco sector, a series of resolutions were tabled during the third Annual Sacco Subsector Regulatory Policy and Legal Roundtable, 2024, held in Naivasha. The discussions focused on a wide array of subjects, including Money Remittance Services, ESG Reporting, Sacco Shared Services, Fintech Regulations, Collaboration and networking, Safeguarding Sacco Interests, and Compliance issues.
Key highlights include:
Money Remittance Service Provision
– Saccos are urged to champion the concept of a Sacco Shared Services Platform to bridge business and capacity deficits seen in money remittance services.
– A call was made for Saccos to innovate financial products specifically geared towards Kenyans living abroad, aiming to boost revenue through remittances.
– The government has rolled out incentives aiming to escalate remittances to at least Ksh1 Trillion annually, with current data from the Central Bank of Kenya indicating revenues surpassing Ksh640 billion per year.
ESG Reporting Guidelines
– The Environmental, Social, and Governance (ESG) Responsibility Authority is set to devise policy guidelines for ESG reporting to ensure uniformity across the sector while encouraging Saccos to incorporate ESG initiatives within their annual budgets, emphasizing member engagement. ESG is fast transitioning from voluntary to mandatory. Saccos will be expected to prioritize business activities that ensure sustainable growth.
Sacco Shared Services
– There was support for policy suggestions on licensing and supervising Sacco shared services, which are expected to mitigate challenges such as inter-lending among Saccos, provision of affordable Management Information Systems (MIS), and efficient, secure payment solutions.
Fintech Regulations/System Providers
– It’s imperative for Saccos to adhere to the authority’s guidelines on selecting fintech vendors to minimize risks associated with vendor relationships and system migrations.
Collaboration and Networking
– Regulated Saccos are encouraged to participate constructively in the legislative framework and to unify their voices to aid its passage. Moreover, exploiting synergies and sharing knowledge within the sector is deemed crucial for growth.
Safeguarding Sacco Interests
– Saccos were advised to protect digital signatures from misuse and prioritize integrity in recruitment to ensure the Sacco’s interests remain paramount.
Compliance
– SASRA underscored the need for Saccos to adhere to the Unclaimed Financial Assets Authority (UFAA) to avoid punitive charges. Saccos operating insurance agencies are urged to transition them to bancassurance intermediaries before September 30, 2024, under guidance from the Insurance Regulatory Authority (IRA). Moreover, compliance with anti-money laundering measures and the registration with the relevant authorities is mandatory for Saccos.
– Collaboration between the Sacco Societies Regulatory Authority (SASRA) and the Financial Reporting Centre (FRC) for training compliance officers was advocated.
– Saccos were encouraged to consider amalgamation as a strategic move towards growth and benefiting from economies of scale.
These resolutions underscore a comprehensive approach to addressing the challenges and opportunities within the Sacco industry, aiming for a more inclusive, efficient, and sustainable sector.
