The landscape of cooperative management in Kenya is set for a seismic shift following the presentation of a landmark report to President William Ruto at State House. If the government acts on the recommendations made by the Committee of Experts in the report, the “business as usual” approach to managing cooperatives will become a thing of the past.
To instill a culture of integrity, the report mandates rigorous “fit and proper” tests for top Sacco executives. Under the new guidelines, Sacco CEOs and C-suite officials must undergo a formal clearance process before being permitted to serve.
“We want to ensure that a shilling in a Sacco is as safe as a shilling in a bank,” said Patrick Kilemi, Principal Secretary for Cooperatives. “By introducing these controls, we are ensuring that the same standards of good governance and protection for savers found in the banking sector are applied here at par.”
Beyond executive vetting, Saccos will be required to bolster their internal controls, enhance the capacity of their finance teams, and engage highly qualified auditors to ensure robust compliance.
The comprehensive report, authored by a committee of experts, outlines a roadmap for the transformation and modernization of Kenya’s co-op movement. Central to these reforms is a digital overhaul, recommending that Saccos upgrade their digital infrastructure, adopt shared services, and integrate fintech solutions to drive operational efficiency.
On the governance front, the experts propose a total overhaul of management structures. This includes strengthening the “fit and proper” criteria for both CEOs and board members to safeguard member savings. The ultimate goal is to align Saccos’ regulatory controls with those of commercial banks, providing a higher level of security for the public’s money.
This initiative is part of a broader government strategy to revitalize the cooperative sector. This strategy includes a comprehensive review of the Sacco Societies Act of 2008 and the development of new regulations aimed at fostering unprecedented levels of accountability and transparency.
“We are implementing reforms designed to strengthen these organizations, which are the backbone of financial access for millions of Kenyans in both the formal and informal sectors,” said President Ruto. “Our goal is to build resilient Saccos that empower communities and facilitate access to affordable credit. We are focused on modernizing operations and, most importantly, protecting the savings of hardworking citizens.”
The Committee of Experts was appointed in 2025 by Hon. Wycliffe Oparanya, Cabinet Secretary for Cooperatives and MSMEs Development. Led by Chairperson Ms. Marlene Shiels, the team was tasked with reviewing the Sacco Societies Act to ensure it remains relevant in the face of emerging global trends and challenges.
The committee features a high-profile membership, including Mr. Maurice Smith (a member of the US Supreme Court Bar and former CEO of the Local Government Federal Credit Union), Dr. Nelson Kuria (CIC Group Chairperson), Mr. Odhiambo Harrison (Advocate of the High Court), and Dr. Gamaliel Hassan (CEO of Stima Sacco).
Tightening the Noose on Financial Accountability
In a move to enforce personal responsibility, the government will now require Sacco CEOs, Chief Finance Officers, and Finance Managers to sign audited financial statements alongside authorized board signatories.
The Sacco Societies Regulatory Authority (SASRA) noted that this change is intended to cement both personal and collective responsibility for financial reporting. According to SASRA CEO David Sandagi, compliance with International Financial Reporting Standards (IFRS) is now non-negotiable.
“Audited financial statements remain the primary instrument through which regulators and members assess the true financial position, performance, and sustainability of Saccos,” Sandagi stated. He emphasized that high-quality reporting is the bedrock of member confidence. “Weak or inaccurate accounts undermine governance and expose members to significant risk.”
“Under the new guidelines, Sacco CEOs and C-suite officials must undergo a formal clearance process before being permitted to serve.”
