By Jackson Okoth
Deposit-Taking Saccos that run FOSAs will in this financial year pay more levy to the Sacco Societies Regulatory Authority (SASRA).
This follows a ruling by Judge Weldon Korir that found that amendments to the Sacco Societies Deposit Levy order were done in consultation with all stakeholders, hence could not be quashed or faulted.
SASRA increased the Sacco levy from 0.1 per cent to 0.125 per cent and then to 0.175 per cent.
The new levy is paid based on deposits held in any Deposit-Taking Sacco Society that operates a FOSA, at the rate of 0.175 per cent of the total deposits as indicated in the last audited financial statements, subject to a maximum of Sh 10 million per annum.
This is according to The Sacco Societies Levy Order, 2016 signed by John Mwaka, Acting Chief Executive Officer of Sacco Societies Regulatory Authority.
The decision by SASRA to increase the Sacco levy is informed by dwindling financial support from the Exchequer to funds its budget and operations.
Figures indicate that funding from the State to SASRA, which is a parastatal, has been declining for the past six years. For instance, budget allocation from the Government of Kenya to SASRA declined from Sh 113 million in the 2013/14 financial year to Sh 86 million in 2015/16 period. During this period, SASRA has seen its budget deficit widen from Sh12.6 million in 2013/14 to Sh 23.1 million in 2014/15 to Sh 48 million in the 2015/16 financial year.
“You gave birth to a baby who has now outgrown the shoes and clothes. So what should be done in a case like this? We need to build capacity of the technical staff so as to benchmark with the rest of the world. Saccos are expanding so fast and so is risk exposure to members’ deposits,” said John Mwaka, SASRA CEO while pleading with stakeholders to approve increments in the Sacco levy.
He made these remarks at a DT Saccos stakeholders validation workshop attended by Chairmen and Chief Executive Officers of DT Saccos in Kenya.
“While SASRA is making an emotional appeal to the industry to increase the Sacco levy, we need the Authority to provide us with the data and an appropriate formulae that will be used to review the levy accordingly instead of organising meetings such as this each time they want to adjust the levy,” said George Ototo, Managing Director Kenya Union of Saving Credit Co-operatives (KUSCCO).