The Ministry of Cooperatives and MSMEs Development has announced a temporary moratorium on the registration of new Savings and Credit Cooperatives (SACCOs). However, this directive will not impact other forms of cooperatives.
According to Cabinet Secretary Wycliffe Oparanya, this order is intended to allow the ministry to evaluate the existing registered SACCOs, assess their performance, and determine their viability.
“The moratorium on registration pertains specifically to SACCOs due to their financial mediation role, which involves collecting deposits from the public and providing loans. Government intervention is necessary to protect these deposits,” Oparanya explained. He added that those SACCOs that are registered but inactive will be de-registered and liquidated by the Commissioner for Cooperatives as mandated by law. Active and viable SACCOs, on the other hand, will be required to undergo supervision by the Sacco Societies Regulatory Authority (SASRA). If they fail to comply, they too will face de-registration and liquidation.
Additionally, a Committee of Experts appointed by the Cabinet Secretary is tasked with reviewing the current requirements for SACCO registration, which is currently set at a minimum of just ten members. “Is this sustainable?” Oparanya questioned.
