Taming Sacco madness

New policy to strengthen Saccos - Munya

It proposes new structure that promotes integration and enhances self-regulation.

In Summary

• Government proposed drastic measures to monitor, audit and ensue transparency in the cooperatives sector in bid to protect members.

• The radical policy to strengthen 23, 000 cooperatives activities, redefine their activities, enhance the green economy and ensure 15 million members are in charge of their saccos.

Industrialization CS Peter Munya (C) is taken round Hella Garments Epz Limited's factory at Export Processing Zone in Athi River, Machakos County on Thursday.
Industrialization CS Peter Munya (C) is taken round Hella Garments Epz Limited's factory at Export Processing Zone in Athi River, Machakos County on Thursday.

The government has formulated new measures to monitor, audit and ensure transparency in the cooperatives sector, according to Trade and Co-operatives CS Peter Munya.

He ad the new  policy will apart from protecting more than 15 million co-operative society members, will strengthen the activities of 23,000 cooperatives, redefine their activities and enhance the green economy. 

If implemented, it empowers Saccos to take a centre stage on the Big four agenda, Vision 2030, National Payment System, agency banking and share trading.


“The government recognises the need to strengthen enforcement and therefore proposes to restructure Sacco Societies Regulatory Authority to regulate financial cooperatives,” Trade CS Peter Munya said in the new policy.

Munya said the policy is necessitated by the changing socio-economic and political environment, innovations, emerging trends and national development priorities.

Titled Promoting Co-operative Societies for Industrialisation, the policy will ill create a Cooperative Regulatory Authority for non-financial cooperatives, streamline the tribunal and alternative dispute resolution mechanisms to ensure accountability.

It proposes a new structure that promotes integration and enhances self-regulation to allow saccos maximise on returns.

It will empower societies to mobilize savings, enhance agricultural productivity, value addition and take part in the provision of decent and affordable housing. Others are fighting poverty and promoting the involvement of youth and women in wealth creation and empowerment.

“It provides a framework for mobilizing financial and technical assistance for

it also enhances co-operative board effectiveness with a clear separation between the management roles and the board.


“It also recognizes the importance of delegates vis-à-vis the rights of individual members and responds to the need to stratify the co-operative societies for ease of regulation and supervision,” the draft policy says.

The policy also addresses the general credit management in producer co-operatives emphasizing on borrowers’ education to reduce delinquency.

“This policy further lays the ground and emphasis on co-operatives to adopt value addition to their raw produce,” Munya said.

He sad the policy would help the government establish a national data centre for co-operatives to among other functions help capacity build the information management of co-operatives.

Since co-operatives can now register companies, the purpose of dual registration as a company and sacco will no longer necessary.

The policy will also develop a legal and regulatory framework to raise capital using capital market instruments and establishment a secondary market for co-operative securities.

It also creates an enabling environment to engage in Public-Private Partnerships and Business Process Out-Sourcing with established manufacturers in order to eject new capital and enable technology transfer.

The state will maintain an approved register of audit firms, carry out inquiries, inspections and investigations into the affairs of co-operatives, enforcement of surcharges and set standards.

The new policy blames the collapse of saccos on ineffective leadership micro-management by boards.