Members of the National Assembly Departmental Committee on Trade, Industry and Cooperatives have called for stronger safeguards in the proposed law governing Savings and Credit Cooperative Societies (SACCOs), saying the legislation should protect members’ savings without creating unnecessary bureaucracy.
The committee, chaired by Bernard Shinali, met officials from the SACCO Societies Regulatory Authority (SASRA) to deliberate on the proposed Sacco Societies (Amendment) Bill, 2025, which seeks to strengthen the regulation of SACCOs and enhance the protection of members’ savings.
During the meeting, legislators cautioned against introducing excessive administrative requirements that could complicate the operations of SACCOs. They noted that SACCOs remain a key source of affordable credit for many Kenyans, particularly during emergencies, because of their accessible and simplified lending processes.
The lawmakers also questioned the proposed deposit insurance framework, which would compensate depositors up to Sh100,000 in the event of the collapse of a regulated SACCO. They argued that the proposed compensation limit could leave members with larger savings exposed to significant losses and called for a more equitable compensation model.
Members of the committee further urged SASRA to ensure the proposed legislation is forward-looking and responsive to the changing needs of the cooperative sector. They recommended that operational issues be addressed through regulations where appropriate, rather than embedding every reform in legislation, to provide greater flexibility in implementing future changes.
The proposed Bill seeks to improve the safety of members’ savings and deposits through stronger prudential supervision and oversight, while enhancing the sustainability of SACCOs, particularly smaller institutions. It also proposes the adoption of shared digital and technological platforms to help smaller SACCOs reduce operating costs, improve efficiency and benefit from economies of scale.
Appearing before the committee, SASRA Chief Executive Officer David Sandagi said the Bill would strengthen public confidence in SACCOs by establishing a deposit insurance fund to protect members’ savings if a regulated SACCO fails.
Sandagi said that although SASRA has invested heavily in technology to improve supervision, many smaller SACCOs have been unable to adopt similar systems because of financial and technical constraints.
He said the proposed law would allow such institutions to access shared regulatory technology platforms, making supervision more efficient while lowering compliance costs and strengthening the stability of the SACCO sector.
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