Thousands of SACCO members across Kenya could see significant changes in how their savings are managed if the proposed SACCO Societies (Amendment) Bill, 2025 becomes law, with critics warning that some provisions may weaken member control over cooperative societies and expose savings to increased risks.
The Bill, which is currently attracting debate among cooperative stakeholders, seeks to introduce new structures and regulations aimed at strengthening oversight of the SACCO sector. However, opponents argue that several provisions could undermine the principles of democratic member ownership that have traditionally defined Kenya’s cooperative movement.
One of the most contested proposals is the creation of a centralized fund that would hold liquidity reserves from SACCOs across the country. Critics have described the proposed entity as a “super fund,” arguing that it could concentrate control over billions of shillings belonging to SACCO members.
According to concerns raised by stakeholders, the fund’s management would be appointed rather than directly elected by SACCO members, raising fears about accountability and transparency in the management of members’ savings.
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There are also concerns that the centralized fund could be permitted to invest in government securities such as Treasury bills and bonds, as well as support other financial initiatives. Some stakeholders fear this could expose members’ savings to decisions made without direct consultation with SACCO members.
Another contentious issue is the proposal that would allow the fund to provide financial support to struggling SACCOs. While supporters argue that this could strengthen financial stability within the sector, critics warn that weak governance could create opportunities for abuse if proper safeguards are not put in place.
The Bill is also said to introduce stricter controls over liquidity management. Opponents claim this could affect the speed at which SACCOs access funds needed for member loans and other financial services, potentially inconveniencing members.
Of particular concern to many members is a proposal that would cap compensation payable to depositors in the event of a SACCO collapse. Critics argue that a compensation limit of Sh100,000 would be inadequate for members who have invested substantial savings in their cooperatives.
The proposed legislation is further accused of granting regulatory authorities greater powers over SACCO governance, including the ability to intervene in leadership elections under certain circumstances. Some stakeholders view this as necessary oversight, while others see it as a potential threat to the autonomy of member-owned institutions.
There are also fears that the Bill could make it more difficult for members to withdraw their shares and exit SACCOs due to additional regulatory requirements.
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Kenya’s SACCO movement remains one of the most successful cooperative sectors in Africa, boasting more than 14 million members and managing assets and savings estimated at over KSh1 trillion. The sector plays a critical role in providing affordable credit, mobilizing savings, supporting agricultural marketing and enabling home ownership for millions of Kenyans.
As debate over the Bill intensifies, cooperative leaders and members are calling for wider public participation and stakeholder engagement before the legislation is finalized. They argue that any reforms affecting millions of savers must be subjected to thorough scrutiny to ensure they strengthen rather than weaken the cooperative movement.
The coming weeks are expected to be crucial as Parliament considers the proposed amendments, with SACCO members keenly watching developments that could shape the future of one of Kenya’s most important financial sectors.
By Jeff Kirui
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