Small unregulated saccos face June closure as new rules take effect

Small unregulated savings and credit co-operative societies (Saccos) risk closure as the government moves in to police pooled funds that have accumulated to more than Sh100 million from members.

The government also wants to track tech-savvy non-deposit taking saccos that collect member contributions online and through mobile phones as well as those that source for funds in the diaspora.

They will now be regulated by the Sacco Society Regulatory Authority (Sasra).

Sasara has put out a notice giving the unregulated societies 30 days to file their details or risk losing their operating certificate by June this year.

“Given that upon the expiration of the transition period on June 30,2021, no sacco shall be allowed to undertake or to continue undertaking the specified non-deposit taking business, unless the sacco will have complied with the Act and regulations 2020,” Sasra CEO John Mwaka said in a notice.

The government introduced new sacco regulations last year to shine more light into operations of sacco’s including filing regular audits on capital, liquidity and operations.

Despite having thousands of societies operating as saccos, Kenya only regulates 172 entities which collect member deposits and issue loans.

The deposit-taking saccos which hold Sh487.4 billion assets are regulated by Sassra, which requires submission of timely audit and reserves to back their levels of risk.

The rest operate with a certificate from the Ministry of Cooperatives as non-deposit taking saccos and often fail to submit their audits for years.