The government has issued a warning to thousands of Savings and Credit Cooperative Societies (Saccos) that have neglected basic legal requirements, threatening to revoke their operating licences in one of the most significant crackdowns in the sector’s history.
Of Kenya’s 13,000 registered Saccos, only 2,700 consistently file annual returns with the Office of the Commissioner for Co-operatives as required by law. The remaining 10,000-plus have failed to meet this obligation for several years, raising serious concerns about transparency, governance, and the safety of members’ deposits.
“This situation undermines the principles of accountability and risks eroding public confidence in the cooperative movement. Failure to comply will no longer be tolerated,” said Cabinet Secretary for Co-operatives and MSME Development, Wycliffe Oparanya.
Speaking at a cooperative leaders forum, the CS announced that a gazette notice will be issued, requiring all non-compliant Saccos to submit audited accounts and detailed operational reports. Any Sacco that fails to respond within the stipulated period faces immediate licence revocation.
“Members’ savings cannot be left at risk due to negligence or deliberate disregard of the law,” he warned.
The urgency of the crackdown is backed by findings from an expert committee appointed last year to review the Sacco Societies Act. The committee found that more than 5,000 Saccos operate without any regulation, posing systemic risks to Kenya’s broader financial sector and pointing to deep-rooted weaknesses in governance and oversight.
Commissioner for Co-operative Development David Obonyo stressed that weak leadership lies at the heart of the sector’s challenges. “No institution can withstand poor governance. This forum is timely — it equips leaders with the tools to strengthen their organisations and serve their members better,” he said.
The committee found that more than 5,000 Saccos operate without any regulation, posing systemic risks to Kenya’s broader financial sector and pointing to deep-rooted weaknesses in governance and oversight.
Obonyo also called for the swift passage of the long-delayed Cooperative Bill and Sacco Amendments Act, urging that reforms be finalised this year.
Cooperative Alliance of Kenya (CAK) Chief Executive Officer Daniel Marube warned that persistent non-filers risk permanent deregistration. He urged Sacco boards to prioritise transparency and commission independent audits where internal capacity is lacking.
Marube also announced that cooperative leaders have agreed to activate the long-dormant Deposit Protection Fund — a legal provision that has existed on paper for years but was never implemented. The fund, to be managed within CIC Insurance Group, will act as an insurance mechanism to protect members’ savings in the event of a Sacco collapse.
“While our focus is on preventing failures, we must also safeguard members against unforeseen circumstances. The fund will enhance confidence and ensure that hard-earned savings are secure,” he explained.
Marube also revealed that a 15-member committee, representing various cooperative subsectors, has been appointed to align the Sacco Bill currently before Parliament with stakeholder proposals. The goal is to produce a unified regulatory framework capable of guiding the sector for decades to come.
