The government is planning to review the SACCO Societies Act and the regulations to explore ways of coming up with a shared technological services platform for all small cooperatives entities.
This was announced by the Cooperatives and MSME Cabinet Secretary, Wycliffe Oparanya announced that a committee of experts has been set to review related acts and regulations to allow the entrenchment of desired changes to streamline operations of SACCOs with a smaller asset base.
While releasing the SACCO supervisory report, 2024 in Nairobi, the CS emphasized that the shared technological services platform will come in handy in assisting these small-sized SACCOs meet regulatory burden and withstands competition in the financial services space.
Oparanya stressed that such platforms provided solutions to the very many small and medium sized SACCOs across the country to come under the purview of prudential regulations, by enjoying the synergies associated with economies of scale under the common services.
He explained that the grouping such societies was critical for their survival because out of 355-Regulated SACCOs in the Country, at least 216 had relatively small balance sheets of less than Ksh1 billion in assets totaling to Ksh79.66 billion which is only 7.40 percent of the total assets.
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Such small balance sheets, he said undermine their competitiveness in the credit business, which today heavily runs on very robust ICT and technological platforms but which these SACCOs can hardly afford.
“A majority of societies have very smaller balance sheets and cannot generate sufficient resources or revenue required to comply with the prescribed prudential regulation standards, ability to deploy ICT in their operations, meet members’ needs, expand operations but also do not have the technical know-how to assure compliance with prudential regulatory parameters,” he added.
Despite these many milestones recorded in the SACCO industry in the last decade, the CS regretted that there were still more areas to be covered to fully secure and exploit the potential in the SACCO sector.
Oparanya said the government had already issued a temporary moratorium on the registration of new SACCOs, and not all cooperatives, in order to take stock of the existing registered SACCOs and see where they are as well as assess their viability.
He however warned that non active SACCOs will be de-registered and liquidated by the Commissioner for Cooperatives as required by law while those remaining will run under the supervision of SASRA to avert similar predicament.
By Juma Ndigo
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