The government has reaffirmed its commitment to protecting Sacco members’ deposits. It is currently reviewing cooperative laws and regulations to close existing loopholes and enhance the growth of the sector. Wycliffe Oparanya, the Cabinet Secretary for Co-operatives, Micro Small and Medium Enterprises (MSMEs) Development, emphasized the government’s prioritization of cooperatives through the Bottom-Up Economic Transformation Agenda (BETA) due to their ability to pull resources together for national building.
Kenya is reviewing its legislative and regulatory framework within the cooperative sector through the Co-operative Bill 2024 and the Sacco Society’s Amendment Bill 2024 currently in parliament. The aim is to create a legal and regulatory framework that protects the most critical part of cooperatives, which is the members’ deposits.
Oparanya assured that his ministry, along with other relevant government agencies, will ensure accountability for those who mismanage and misuse members’ funds. To facilitate this, the Sacco Societies Regulatory Authority (SASRA) has issued a ‘Whistleblowing Policy’ to promote institutional integrity and transparency by encouraging whistleblowing on misconduct, fraud, and unethical behaviour.
Oparanya highlighted a concerning trend in Capital Adequacy in the recently released Sacco Supervision Annual Report of 2023 by SASRA. He emphasized the need for Sacco’s to prioritize the growth of their capital from internally generated sources through the retention of surpluses.
The CS also called on employers to remit deductions to Sacco’s, addressing a worrying trend where regulated Sacco’s are owed over Sh2.59 billion due to non-remittance by various employers. Oparanya warned against borrowing heavily to pay huge dividends to members, as it may lead to the collapse of Sacco’s.
In addition, he stressed the importance of embracing the principles of Environmental, Social, and Governance (ESG) for co-operatives, focusing not only on financial sustainability but also taking deliberate actions to support clean energy initiatives, reduce carbon emissions, and promote environmental stewardship.
