A focus team appointed by Wycliffe Oparanya, the Cabinet Secretary for Cooperatives and MSME Development, has recommended an extended freeze on the registration of new Saccos (Savings and Credit Cooperative Organizations).
The committee of experts advised that the moratorium, which was originally set in May 2025, should remain in place until a new legal and regulatory framework is enacted to govern the sector. The committee recently presented the ‘Transformation of the SACCO System in Kenya’ report to President Dr. William Ruto at State House, recommending radical changes.
The team recommends that the suspension continue until new regulations are adopted. This follows an initial three-month freeze that was repeatedly extended as the experts conducted their review.
The committee, chaired by Marlene Shiels (CEO of UK-based Capital Credit Union), discovered that there are over 5,000 unregulated Saccos in Kenya. Currently, many Saccos are registered at the county level where regulation is weak. The experts want to create a unified oversight system, potentially strengthening the Sacco Societies Regulatory Authority (SASRA) to cover a broader range of institutions.
Many of these operate at the county level without adequate oversight, leading to “unnecessary competition” and high risks for members.
The team cited several systemic challenges that must be addressed before new players are allowed into the market:
The government is currently reviewing the Sacco Societies Act of 2008. The goal is to align it with digital innovations, global best practices, and emerging financial risks.
Deposit Protection
A central part of the proposed reforms is the establishment of a Deposit Protection and Savings Stabilisation Fund to ensure that members do not lose their life savings if a Sacco fails.
While the freeze prevents new Saccos from launching, the government’s stance is that this “short-term disruption” is necessary to build a more resilient ecosystem. Existing Saccos are being encouraged to focus on governance and digital transformation.
CS Oparanya has also emphasized that once the new laws are in place, registration will resume under stricter vetting processes to ensure only viable and ethical institutions enter the market.
