There will be no extension of the deadline for Saccos to comply with new regulations, says the regulator.
The Sacco Societies Regulatory Authority-(Sasra) will not extend the 30th June 2021 deadline for non-withdrawable deposit-taking Saccos.
Peter Njuguna, SASRA said the Ag. the chief executive officer warned the public against dealing with any Savings and credit cooperative society (Sacco)which will not have complied with the new Regulations by 30th June 2021.
He said there will be extended because the deadline is set out in the law, and SACCOs in the business have had over one year to prepare and comply with the regulations.
“Any person, including members of the public and public entities who undertake such specified non-deposit-taking business transactions or other businesses with an unauthorized person, entity, or Sacco Society, shall be doing so at his/her risk and peril. In addition, the persons involved in such dealing may be liable to criminal prosecutions,” said Njuguna.
According to a public notice put out by Sasra, the regulator indicated that there will be no extension of the June 30, 2021 deadline, after the six-month window expires.
It further warned that “no Sacco society in Kenya shall be allowed to undertake or continue undertaking the specified non-deposit taking business unless the society shall have fully complied with the Act and Regulations 2020.”
The targeted Saccos are expected to comply by making the “appropriate applications to the authority for authorization, following the commencement of the Regulations 2020 on or before June 30, 2021.
Njuguna said in the recent past, many Kenyans have lost their hard-earned savings in pyramid-scheme-like entities operating virtually and purporting to be Saccos.
“They hoodwink unsuspecting members of the public to make savings virtually with them, with the promises of good returns. But immediately after mobilizing money from the public, such entities almost always disappear in the thin air, leaving the depositors with no recourse. The new regulations will thus reign in on such dubious entities,” he said.
Hundreds of non-withdrawable deposit-taking Saccos are targeted in the new regulations issued in May 2020 but which took effect on 1st January 2021.
SASRA says the new regulations target only those with deposits worth Sh100 million and above – and which have been deemed to present a systemic risk to the government.
“Those whose deposits are below Sh100 million, and are neither virtual nor diaspora based, are expected to be overseen by the respective County Government Co-operative Offices where they operate. This will ensure that there is no room for any Sacco to operate without adequate government oversight,” he said.
Njuguna said the regulations are aimed at protecting the savings (popularly known as BOSA deposits) made by the public in these Saccos.
“The regulations are also aimed at ensuring that there are governance structures in Saccos, as well as mandatory minimum disclosures and transparency in the operations of Saccos to assist the public in making prudent investment decisions,” he said.
