Non-compliant saccos face licence revocation
WANGARI NDIRANGU-KNA
The Government has issued a stern warning to thousands of Savings and Credit Cooperative Societies (Saccos) that have failed to comply with basic accountability requirements, threatening to revoke their licences in what marks a bold reform drive in the sector’s history.
Cabinet Secretary for Co-operatives and Micro, Small and Medium Enterprises (MSME) D eve l o p m e n t , Wycliffe Oparanya, said that of the 13,000 registered Saccos in Kenya, only 2,700 consistently file annual returns with the Office of the Commissioner for Co-operatives as required by law.
The remaining majority—over 10,000, have failed to comply for several years, raising concerns about transparency, governance, and the safety of members’ deposits.
“This situation undermines the principles of accountability and risks eroding public confidence in the cooperative movement. Regulations require all registered Saccos to file returns with the Commissioner for Cooperatives, and failure to do so will no longer be tolerated,” Oparanya said.
Speaking at a three-day forum for cooperative leaders on leadership, ethics, and strategic governance, the CS revealed that within 21 days, a gazette notice will be issued requiring all non-compliant Saccos to submit audited accounts and detailed operational reports.
He warned that failure to comply within the stipulated period will result in immediate revocation of licenses.
“We must enforce regulations to the letter to guarantee prudent financial management. Members’ savings cannot be left at risk due to negligence or deliberate disregard of the law,” he emphasized.
The crackdown comes after a committee of experts appointed last year to review the Sacco Societies Act revealed that more than 5,000 Saccos remain unregulated, posing systemic risks to Kenya’s financial sector.
The report highlighted weak governance structures and poor oversight as major challenges undermining the cooperative movement. Commissioner for Co-operative Development David Obonyo underscored the importance of governance, noting that no institution can withstand poor leadership.
“Many of the challenges facing our cooperative institutions today stem from weak governance. This forum is timely as it equips leaders with tools to strengthen governance and meet the aspirations of members,” he said.
Obonyo urged swift enactment of the long-delayed Cooperative Bill and Sacco Amendments Act, stressing that reforms must be finalized this year to safeguard the sector.
“This must be our collective legacy—ensuring that these long-awaited reforms are realized,” he added.
Cooperative Alliance of Kenya (CAK) Chief Executive Daniel Marube echoed the call for accountability, warning that continuous default in filing returns risks deregistration.
He urged boards and management teams to uphold transparency and seek audit services where lacking. Marube also announced that cooperative leaders have agreed to operationalize the long-awaited Deposit Protection Fund, a legal provision that had remained dormant for years.
The fund, to be managed within CIC Insurance Group, will act as an insurance mechanism to protect members’ savings in the event of a Sacco collapse.
“While our focus is on preventing failures, we must also safeguard members against unforeseen circumstances. The Deposit Protection Fund will enhance confidence and ensure that members’ hard-earned savings are secure,” Marube explained.
On broader reforms, Marube revealed that a 15-member committee representing various cooperative subsectors has been appointed to harmonize the Sacco Bill currently before Parliament with stakeholder proposals.
“The team will deliver a unified framework to guide the sector for decades,” he said.
The government’s reform agenda aims to foster growth through regulation and policy formulation, enhance financial inclusion, and strengthen the cooperative movement’s role in Kenya.