Employers that have withheld billions in unremitted SACCO (Savings and Credit Cooperative Organization) deductions may soon face legal consequences under the proposed Cooperatives Bill 2024, which is set to tighten regulations in this area.
Designated as National Assembly Bill No. 7 of 2024, this legislation empowers SACCOs to take legal action against employers at the Cooperatives Tribunal for failing to remit member contributions. Current estimates suggest that this issue involves over Ksh 3.5 billion in unremitted funds.
If passed, the Bill would expand the authority of the tribunal, giving SACCOs a stronger legal framework to recover withheld contributions, a move that many in the sector view as a significant step forward. Despite this potential for legal recourse, there are ongoing concerns about whether cooperatives will actually pursue legal action against their members’ employers.
Regulators have long expressed concerns about the persistent issue of delayed remittances, yet many employers continue to withhold SACCO deductions, often without oversight or accountability. According to the latest Sacco Supervision Annual Report 2024 from the Sacco Societies Regulatory Authority (SASRA), County Governments and Assemblies stand out as the largest defaulters, with an outstanding debt of about Ksh 1.69 billion.
Other notable defaulters include Public Universities and Tertiary Colleges, which owe Ksh 762.3 million, and Private sector companies with debts amounting to Ksh 433.9 million. State Corporations are also among the offenders, owing Ksh 164.8 million, while public sector companies collectively have not remitted Ksh 265.7 million in SACCO contributions.
The list of major defaulters includes National Government Ministries (Ksh 129.7 million), Constitutional Bodies (Ksh 6.8 million), Churches and church-related institutions (Ksh 18.3 million), Public Schools’ Employees-BOM (Ksh 16.9 million), Private Universities (Ksh 5.9 million), co-operative entities (Ksh 37.5 million), and Private Sector Schools (Ksh 14.6 million).
The repercussions of the non-remittance of SACCO dues extend to nearly 55,672 members across both Deposit-Taking SACCOs and Non-Withdrawable Deposit-Taking SACCOs. As discussions around the Cooperatives Bill 2024 continue, the hopes of many members rest on the potential for transformative changes that could ensure their contributions are safeguarded.
