TIGHTEN REGULATIONS

Rogue Saccos to be tamed if co-op societies Bill becomes law

Wayward Saccos are a cause for anxiety in the multibillion-shilling industry

In Summary
  • The Bill states that both the national and county governments shall put in place measures to promote the development of the cooperative sector and effective management of Saccos.
  • The government has been under pressure to act swiftly as several Saccos  face liquidity problems. The 23,000 registered saccos have an asset base of Sh1 trillion. 
Trade CS Betty Maina.
Trade CS Betty Maina.
Image: COURTESY

Days are numbered for rogue savings and credit cooperative societies which continue to defraud Kenyans of their lifetime savings if the Senate enacts a bill aimed at taming wayward Saccos.

The Cooperative Societies (Amendment) Bill, 2020 by nominated Senator Agnes Zani seeks to compel the Ministry of Industry, Trade and Cooperatives to tame Saccos that have been causing anxiety in the multibillion-shilling industry.

It urges the speeding up of regulations to rein in such Saccos. The government has been under pressure to act swiftly as several Saccos face liquidity problems.

The Bill, which already is through its first reading, states that both the national and county governments shall put in place measures to promote the development of the cooperative sector and the effective management of Saccos.

On July 21, last year, President Uhuru Kenyatta directed the Ministry of Industry, Trade and Cooperatives to fast-track the formulation of the National Cooperative Policy and operationalise the proposed Sacco Societies Fraud Investigation Unit within the Sacco Societies Regulatory Authority (Sasra).

“The government will increase policy interventions to fix loopholes in the sector,” the President assured.

The Zani Bill says the Cabinet Secretary responsible for matters relating to co-operative development should formulate a national policy framework and standards for the development and growth of cooperative societies.

“The Cabinet Secretary will maintain a register of approved audit firms in the cooperatives sector and formulate management standards for cooperative societies,” it adds.

Further, the CS is required to develop and coordinate the implementation of an intergovernmental relations mechanism in the cooperatives sector.

Each county government shall formulate and implement strategies, guidelines and measures in line with the national policy framework and standards.

The counties will also be required to promote, facilitate and register primary cooperatives societies and promote and facilitate value addition.

“They will also perform such other functions as may be necessary for the fulfilment of the mandate of the county government under this Act and for the betterment of the cooperatives sector,” the Bill says.

Since devolution in 2013, challenges have emerged in the management and supervision of cooperatives. There have been calls for closer cooperation between the national and the county governments as a result.

There are 23,000 registered cooperative societies with a membership of 14 million.

The cooperatives hold Sh732 billion of members' savings, control an asset base of Sh1 trillion and a Sh700 billion loan portfolio.

Restructuring Sasra is one of the recommendations in the proposed National Cooperative Development Policy.