A bill before Kenya’s National Assembly proposes a new tier in the country’s cooperative savings sector: “secondary SACCOs,” institutions built to serve other SACCOs rather than individual savers.
The Sacco Societies (Amendment) Bill, 2025, sponsored by Majority Leader Kimani Ichung’wah and gazetted in June 2025, would let at least 30 licensed primary SACCOs voluntarily form a secondary co-operative society to manage pooled liquidity and shared services. These bodies could hold liquidity reserve accounts for members, take inter-SACCO deposits, lend short-term to member SACCOs, invest in government securities, and — subject to Central Bank approval — access the interbank market. They would be barred from taking deposits or lending directly to individuals, trading, or investing in venture capital, addressing fears of a state-controlled “super SACCO” reaching into members’ savings.
The Bill places secondary SACCOs under close supervision by the Sacco Societies Regulatory Authority (SASRA), including mandatory licensing, capital and liquidity adequacy rules, a binding code of conduct, vetting of directors as “fit and proper,” and criminal penalties of up to Sh3 million or five years’ imprisonment for non-compliance.
The reforms follow the near-collapse of the Kenya Union of Savings and Credit Co-operatives (KUSCCO), where a 2025 audit found roughly Sh14.6 billion belonging to 201 SACCOs at risk amid fraud and a liquidity crisis, with no dedicated legal framework governing such pooling arrangements.
A second strand of the Bill overhauls the long-dormant Deposit Guarantee Fund, restructuring its Board of Trustees with stricter qualification and independence requirements, and clarifying how members can claim protected deposits once a SACCO’s licence is revoked.
Much of the framework’s real substance — capital thresholds, penalties, and conduct rules — is left to future SASRA regulations, meaning its effectiveness will depend heavily on implementation after the Bill’s passage.
