Barring any other plans, Kenya is set to launch a crackdown on Savings and Credit Co-operatives (SACCOs). In a notice issued on Friday 29 January by John Mwaka, CEO of the Societies Regulatory Authority (SASRA), SACCOs undertaking the stated non-deposit-taking enterprise SACCO (BOSA) were granted various deadlines for compliance with the components of the Acts and Regulations 2020.
“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.
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Here Is What You Need To Know
- Institutions are expected to include, within the next thirty days (since the date of publication of the notice), specific information and other information relating to SACCO companies by filling in the details and information of SACCO non-withdrawable deposit companies.
- SACCOs that are expected to provide detailed details on the direct or indirect effect of the application of Regulations 2020 will be consulted directly by the Authority.
- The SACCOs were directed to apply to the Authority, within six months of the starting date on or before 30 June 2021, for authorization in compliance with the regulations. Institutions will have access to an application template that can be downloaded from the Authority’s website or written to the Authority upon request.
- SACCOs were also expected to take account of the criminal and supervisory penalties for non-compliance provided for in Regulation 96(6) of the 2020 Regulation. SASRA is the principal government agency responsible for the SACCO Society’s oversight and control in Kenya.
- There are 187 registered SACCOs in Kenya with 162 licensed to conduct Sacco deposit-taking business as of 30 December 2021, while 12 have been issued conditional deposit-taking licenses and three have ceased Sacco Business deposit-taking and are therefore not allowed to accept withdrawable deposits or provide payment services from their members.
- SACCOs are an integral part of Kenya’s financial system and account for an estimated 10% of deposit-taking intermediaries’ assets.
- A 2017 banking report reported that three million Kenyans are provided with services by saving platforms and often provide services that can not be found elsewhere, such as in rural areas where many farmers depend on them for credit and payment services.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer