Sacco industry lobby wants Sasra levy increment scrapped

Sacco industry lobby Kuscco has opposed increase of levies charged on member deposits to fund operations at the Sacco Societies Regulatory Authority (SASRA).

Deposit- taking saccos that fall under Sasra have Sh310 billion in deposits. FILE PHOTO | NMG 
Advertisement

Sacco industry lobby Kuscco has opposed increase of levies charged on member deposits to fund operations at the Sacco Societies Regulatory Authority (SASRA).

Kuscco said increasing the 0.1 per cent levy to rise to 0.175 in the next five years would increase operational costs that will end up being passed on to members as charges for services offered and raising of loan interest rates.

“Sacco deductions will rise significantly in nominal terms, with the large saccos expected to contribute the set maximum of Sh10million, said Kuscco chairman George Magutu. He said the new levy by Sasra would force deposit taking Sacco to charge higher fees for their loans hurting uptake as well as discourage them from growing member deposits as levy deductions are based on savings made.

“A taskforce should be formed to probe Sasra’s finances as well as recommend measures to improve its operations without necessarily increasing the levies,” he said.

READ: Rotich eyes Sh23bn from rich market regulators

Deposit- taking saccos that fall under Sasra have Sh310 billion in deposits and an asset base of Sh442.9 billion whereby their loan book currently stands at Sh288 billion.

In its August 20, 2018 circular, Sasra has staggered the increment, with saccos expected to charge a 0.15 per cent levy on the deposits this year, 0.125 per cent in 2019, 2020 and 2021 before arriving at 0.175per cent in 2022.

Sasra said the increment was informed by the government’s plan to withdraw its annual 40per cent budgetary allocation adding that while Kenya had an initial 98 deposit taking saccos, the same had risen to the current 176 straining Sasra’s resources.

More From Business Daily
This page might use cookies if your analytics vendor requires them. Accept