A government‑appointed team of experts has advised the Ministry of Co‑operatives and MSMEs Development to maintain the suspension on registering new Saccos until a stronger legal framework is established.
This comes amid concerns over governance gaps, unregulated growth, and the safety of members’ deposits in Kenya’s expansive cooperative sector.
The committee, formed by Cabinet Secretary Wycliffe Oparanya in May 2025, was tasked with reviewing existing laws and proposing reforms to safeguard liquidity, strengthen deposit protection, and create a unified oversight system. Their findings highlight the urgent need for regulatory clarity before new Saccos are allowed into the market.
“Central to these recommendations is a continuation of the moratorium on registering new Saccos. This will ensure that any new entities operate under updated regulations once adopted,” the committee stated in its report.
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The experts stressed that premature registration could expose members to risks in a sector already grappling with weak governance structures.
The review, chaired by Marlene Shiels, CEO of the UK‑based Capital Credit Union, revealed that more than 5,000 Saccos remain outside formal regulation. Many of these operate at county level, struggling with digitisation, capitalisation, and management capacity.
The committee also noted that overlapping training and education services among Saccos have created unhealthy competition rather than collaboration.
Currently, county governments have no legal mandate to regulate Saccos, leaving a vacuum in oversight. The proposed reforms aim to devolve certain responsibilities while ensuring national standards remain consistent.
“To achieve universal regulation of Saccos in Kenya, the Sacco Societies Regulatory Authority (SASRA). The Commissioner for Co‑operative Development and County Governors must work in coordinated alignment. Each plays a distinct but interdependent role in the Sacco ecosystem,” the experts observed.
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Under the proposed framework, the National Government would continue setting uniform prudential standards, strengthen the Commissioner’s office, and enforce minimum registration and operational requirements.
This approach, the committee argued, would guarantee safer and more reliable services for Sacco members while gradually integrating unregulated cooperatives into formal supervision.
The ministry had already suspended new registrations in mid‑2025 pending the review. With the latest recommendations, the freeze is expected to continue until Parliament adopts new regulations, ensuring that future Saccos are built on a foundation of accountability and sustainability.
By Masaki Enock
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