The government has republished the Sacco Societies (Amendment) Bill 2018 that seeks to compel Savings and Credit Co-operative Societies (Saccos) to share credit details with the Credit Reference Bureaus (CRBs).
The move comes after the Court of Appeal, in November 2021, failed to overturn a High Court decision that nullified the Bill among other 20 Bills that had become law.
In the High Court Ruling, the judge bench composed of Justices Jairus Ngaah, Antony Ndungu, and Teresiah Matheka, stated that the laws were unlawful as they had become law without the input of the Senate.
The court further directed the National Assembly to redo the process in compliance with the requirements of the constitution.
“The impugned acts are in contravention of Article 96, 109, 110, 111, 112 and 113 of the Constitution and are therefore unconstitutional, null and void.
“We are properly guided and in the circumstances of this case shall suspend our orders to nullify the impugned acts for a period of nine months within which period the National Assembly ought to have complied with provisions of Article 110 of the constitution and regularized this Acts and in default, they stand nullified,” the judges ruled then.
While announcing the republishing of the Bill, Majority leader, Amos Kimunya, stated that the Bill would be taken to the senate as directed by the courts.
“This Bill has been republished following the Court of Appeal judgment in Civil Appeal No E084 of 2021, which nullified the Sacco Societies (Amendment) Bill 2021 for want of participation by the Senate,” Kimunya stated.
If the Bill is passed by parliament, Saccos will be compelled to share credit information of Kenyans with CRBs just like the banks and other financial institutions under the Banking Act and Microfinance Act of 2008.
At the moment, Saccos can only share credit information with CRBs after getting consent from their customers and seeking approval from the Central Bank of Kenya (CBK).
According to a Business daily report in February, it was reported that Saccos had to borrow Ksh31 billion from banks to meet the demands for loans from Kenyans who were borrowing more than saving. In 2018, Kenyans took loans worth Ksh372 billion from Saccos.
If the bill becomes law, many Kenyans who depend on taking loans from Saccos risk being listed on CRBs hence affecting the access to credit.
