- Xavier Lugaga urges Parliament to ensure the Sacco Societies (Amendment) Bill, 2025 strengthens governance without undermining member ownership and democratic control of SACCOs.
A movement built by its members
When Kenya’s economic history is written, the cooperative movement will earn a special chapter. Few institutions have empowered ordinary wananchi like Savings and Credit Cooperative Societies (SACCOs) have. They have helped teachers educate their children. They have helped farmers buy inputs. They have helped civil servants build homes and traders grow their businesses. Millions of Kenyans have escaped costly commercial loans because of them.
Today, the movement counts more than 14 million members. It controls savings estimated at over Ksh1 trillion. Government subsidies and foreign aid did not build this achievement. Members built it themselves, by pooling resources and deciding democratically how to manage them.
That is why the Sacco Societies (Amendment) Bill, 2025 deserves careful scrutiny before it becomes law.
A bill that deserves scrutiny
No reasonable person opposes reforms that strengthen governance, eliminate fraud or protect members’ deposits. The collapse of poorly managed financial institutions has shown the need for stronger regulation and greater accountability. Reforms that improve liquidity management, strengthen supervision and cushion members against institutional failure are welcome.
But legislation should strengthen the cooperative movement. It should not fundamentally alter its character.
The greatest worry about the proposed law is a simple one. Many fear it shifts power away from ordinary members. They fear it hands more authority to government appointed structures and regulators. Parliament should never dismiss these concerns, whether real or perceived, because confidence is the lifeblood of any financial institution.
Democracy at stake
Kenya built its cooperatives on internationally recognized principles of democratic member control. Members elect their leaders. They approve policies. They decide the direction of their societies. Any legal framework that appears to weaken these rights risks eroding the very foundation that has let the movement flourish.
Savings and trust
Access to savings raises equally serious concerns. Kenyans save in SACCOs because they expect quick access to affordable credit. If new regulatory layers slow loan approvals or create liquidity bottlenecks, members may drift to other financial institutions, even at higher cost.
READ:
Alarm as proposed SACCO Amendment Bill 2025 sparks fears over members’ savings
Members have also raised questions about the proposed deposit guarantee arrangements. Deposit insurance is an important safeguard. But members with large savings will naturally ask whether the proposed compensation level would truly protect their lifetime investments if a SACCO fails. These concerns deserve open public discussion, not political dismissal.
Bill has also revived an old debate: how far should government reach into the internal affairs of cooperatives? Strong oversight matters. It prevents fraud and protects members. But regulation should never become control. Cooperatives are private, member owned institutions, not State corporations. Parliament must carefully preserve this balance between accountability and autonomy.
What Parliament must do
Parliament now carries a heavy responsibility. Legislators must resist the urge to rush through a law that will affect millions of Kenyan households. They should examine every clause with one question in mind: does it strengthen the cooperative movement, or does it weaken member ownership?
Kenya’s cooperative sector has earned global recognition because it stays rooted in democratic participation, self-help and mutual responsibility. Regulatory reform should never cost the movement these values.
If the proposed law improves transparency, strengthens governance, protects deposits and boosts financial stability while preserving members’ democratic rights, it will mark another milestone for Kenya’s cooperative movement. But if it centralizes too much authority, weakens member control or undermines confidence in SACCOs, it could damage one of Kenya’s most successful homegrown institutions.
The cooperative movement belongs to its members. Parliament must protect their savings, respect their voice and preserve the democratic principles that have sustained the movement for generations.
The stakes are simply too high to get it wrong.
By Xavier Lugaga
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