The Co-operatives and MSMEs Development Cabinet Secretary, CS Wycliffe Oparanya have called for financial accountability, directing Sacco Societies Regulatory Authority (SASRA) and the Commissioner of Cooperatives to enforce strict oversight of audited SACCO accounts.
Speaking during the SACCO Supervision Annual Report 2024 launch in Nairobi, CS Oparanya said such reforms is aimed at tightening financial accountability and boost customer confidence in the credit taking institutions.
“All financial reports and statements must be countersigned by the Chief Executive Officers and Finance Officers who prepare them, alongside the Board of Directors,” Oparanya said. “This will ensure shared accountability and eliminate loopholes.”
He further issued a directive barring SACCOs from borrowing externally to pay dividends, a practice he termed unsustainable and risky.
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“No SACCO shall be allowed to borrow from external sources to pay dividends,” he declared. “Henceforth, any SACCO intending to procure an external loan must obtain written approval from the Commissioner, subject to compliance with the prescribed ratios.”
The directive is expected to curb financial engineering practices that expose SACCOs to liquidity risks and undermine member confidence. Oparanya emphasized that SACCOs must operate within their means and uphold the principles of cooperative governance.
Principal Secretary Patrick Kilemi echoed the call for transparency, urging SACCO leaders to embrace digital transformation and data-driven decision-making.
By Masaki Enock
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