The government is set to embark on a crackdown on Savings and Credit Co-operatives (SACCOs) in Kenya
In a notice by the Societies Regulatory Authority (SASRA) CEO John Mwaka on Friday, January 29, the SACCOs undertaking the specified non-deposit-taking SACCO (BOSA) business were given various deadlines to comply with components of the Acts and the Regulations 2020.
The institutions are required to provide the detailed particulars and other information relating to the SACCO Societies within the next thirty days (since the date of publication of the notice) by completing the detailed particulars and information of non-withdrawable deposit-taking SACCO societies.
SACCOs that are required to provide detailed information shall be directly consulted by the authority on the direct or indirect impact of the implementation of the Regulations 2020.
The SACCOs were directed to make appropriate applications to the Authority for authorization in accordance with the regulations within six months of the commencement on or before June 30, 2021.
The institutions can access the application template which may be downloaded from the Authority's website or upon request in writing to the Authority.
"Notice is further given that upon the expiry of the transition period on June 30, 2021, no SACCO Society shall be allowed to undertake or continue undertaking the specified non-deposit taking business, unless the SACCO Society will have complied with the Act and the Regulations 2021," the notice read in part.
The SACCOs were also to take note of the penal and supervisory sanctions for non-compliance as prescribed of the regulation 96 (6) of the regulations 2020.
SASRA is the government's principal agency responsible for the supervision and regulation of the SACCO Society in Kenya.
AS of December 30, 2021, there are 187 registered SACCOs in Kenya with 162 licensed to carry out deposit-taking Sacco business while 12 have been granted conditional deposit-taking licenses and three have ceased Deposit -Taking Sacco Business and thus not authorized to receive withdrawable deposits from their members or provide payment services.
SACCOs form a vital part of Kenya’s financial system and account for an estimated approximately 10% of the assets in deposit-taking intermediaries.
A 2017 banking report revealed that the saving platforms provide services to three million Kenyans and frequently offer services that cannot be found elsewhere such as in rural areas where many farmers depend on them for credit and payment services.
