EXPLAINER
How Saccos will be overhauled in new Bill
Kenya’s co-operative sector stands on the brink of its most significant transformation in over a decade following the introduction of the Sacco Societies (Amendment) Bill, 2025. Tabled by National Assembly Majority Leader Kimani Ichung’wah, the Bill proposes sweeping changes to how Saccos manage liquidity, share technology infrastructure, and protect member deposits.
Stronger Oversight and Penalties
SASRA gains substantially expanded powers under the Bill, including authority to set capital and liquidity adequacy requirements, conduct on-site and off-site inspections, and vet board members and senior officers through a mandatory “fit and proper” assessment before appointment. Non-compliance carries stiff consequences — fines of up to KES 3 million, imprisonment of up to five years, or both.
Deposit Guarantee Fund
The Bill also overhauls the Deposit Guarantee Fund, which protects members when a Sacco collapses. Key changes include a presidentially appointed non-executive chairperson requiring at least fifteen years’ experience in banking, finance, or law, and a reformed board that incorporates the Principal Secretaries of the Treasury and Sacco departments. A new provision shields DGF board members and staff from personal liability for good faith actions, while deposit protection remains capped at KES 100,000 per member.
Balancing Progress and Autonomy
Analysts describe the Bill as a double-edged sword. The central liquidity mechanism could eliminate cash flow crises and reduce transaction costs, potentially delivering higher returns to members. However, increased centralisation and stronger government presence on the DGF board may raise concerns among those who value the traditional independence of the cooperative movement.
For the millions of Kenyans who rely on Saccos for everyday financial services, the reforms signal a future where Saccos evolve from community savings groups into a fully integrated, institutionally robust pillar of Kenya’s national economy. The Bill is expected to undergo public participation before progressing through the National Assembly.
What is a Secondary Co-operative Society?
Think of it as a “Sacco for Saccos” — a financial institution owned and run by Saccos, exclusively to serve other Saccos. It does not deal with individual members of the public at all.
How is it formed? At least 30 licensed Sacco societies must come together to create one, and it must obtain a license from SASRA before it can operate.
What does it do? It solves two big problems that Saccos have long faced — cash flow gaps and the high cost of technology:
On the money side, it acts as a central pool where Saccos deposit funds, borrow short-term cash when they need it, lend to each other, and invest in Government securities. Think of it as an emergency cash reserve for the entire network.
On the technology side, it provides a shared payments platform, settles transactions between Saccos, issues payment instruments like cards or digital tokens, and handles both local and international money transfers — services that would be too expensive for small Saccos to build on their own.
It can even participate in Kenya’s inter-bank market, giving the Sacco sector a direct connection to the national financial system for the first time.
What can it NOT do? It cannot take deposits from individuals, lend to individuals, trade in goods, or invest in venture capital. Its sole purpose is serving its member Saccos.
Who runs it? A board of non-executive directors elected by member Saccos, plus a CEO appointed by the board. No one can take up a leadership role without SASRA’s approval as a “fit and proper” person.
In short, the secondary co-operative society is designed to be the financial backbone of the Sacco sector — bringing stability, shared technology, and mainstream integration while keeping the cooperative identity intact.
Source: Sacco Societies (Amendment) Bill, 2025
