The World Council of Credit Unions (WOCCU) has released its anticipated 2025 Global Regulatory Update, urging credit unions and cooperatives worldwide to prioritize the protection of their cooperative structures and engage in proactive advocacy. The report outlines essential strategies for Kenyan cooperatives to navigate emerging regulatory trends.
The update emphasizes several critical focus areas for Kenyan cooperatives, including effective regulatory engagement with government officials and the protection of tax-exempt status. With the International Year of Cooperatives (IYC) approaching, the report highlights the importance of amplifying success stories to garner political support.
WOCCU emphasizes the need for cooperatives to bolster their efforts in digital transformation, climate-related financial disclosures, and strengthening national regulatory frameworks. Policymakers often lack sufficient understanding of the cooperative model, indicating a pressing need for targeted advocacy. Cooperatives are encouraged to engage newly appointed government officials to educate them on the significant role of Savings and Credit Cooperatives (SACCOs) in promoting financial inclusion.
The report also raises concerns over the increasing regulation of artificial intelligence (AI). The European Union’s AI Act categorizes credit scoring as “high risk,” while the Financial Stability Board warns that AI could heighten vulnerabilities within the financial sector. Kenyan cooperatives were urged to stay abreast of new AI regulations from the Central Bank of Kenya (CBK) and the Communications Authority (CA) and to ensure compliance while responsibly adopting AI tools.
Addressing climate-related financial risks is another key recommendation from WOCCU. The report cautions that the threats posed by climate change are escalating, prompting cooperatives to prepare for natural disasters and evaluate associated financial risks. WOCCU advises Kenyan cooperatives to develop climate risk assessments that address the impact of droughts and floods on members’ repayment capacities and to engage with CBK on climate-related financial disclosures.
Kenya’s efforts to adapt cooperative regulations are ongoing, and the International Year of Cooperatives presents a critical opportunity to advocate for more favourable legislation. Leaders in the cooperative sector are encouraged to push for cooperative-friendly laws, including a comprehensive review of the Cooperative Societies Act and exemptions from overly burdensome banking regulations. Additionally, Kenyan cooperatives can leverage WOCCU’s network to benchmark global best practices.
As 2025 approaches, the call for action is clear: Kenyan cooperatives must unite in their advocacy efforts to embrace emerging challenges and seize opportunities in the evolving regulatory landscape.
