Non-compliant Co-ops to be deregistered.


May 31, 2017

By Jackson Okoth.

The newly appointed Commissioner for Co-operative Development, Mary Mungai has issued a stern warming to all Co-operative Societies that do not follow the law that they will soon be de-registered. She made these remarks on the sidelines of recent Kenya Police Sacco Annual Delegates Meeting (ADM) held at Intercontinental Hotel, Nairobi.
“We have already written a circular to all Co-operative societies to fully comply with the Co-operatives Act. We will deregister any society that fails to meet the 30th April, 2017 deadline,” said Ms Mungai.
She expressed concern that while over 22,000 Co-operatives have been registered; only about 6,000 of these societies had complied with the law while the rest were not even acting as Co-operative societies.
Ms Mungai’s comments on non-compliance come against the background of murmurs in the industry over whether public transport Saccos should use the name Sacco. This is after observations that many of these Matatu Saccos are following the principals and the Co-operative movement, including mobilising savings and offering affordable credit to members.
Ms Mungai expressed concerns that while many public transport vehicles (PSVs) have organised themselves into transport Saccos, these Societies were now too many and that members were not getting any benefits.
“I urge some of these large Matatu Saccos to pool their resources and partner with huge transporters such as those running the Standard Gauge Railway so that they give more benefits to their members,” said Mungai.
She also disclosed that plans are underway to establish an inter-governmental platform that will assist in defining roles of the National and County Governments when dealing with issues affecting the Co-operative sector.
Although Co-operatives is a devolved function, not all of these activities that were previously performed by the now defunct Ministry of Co-operatives Development and Marketing have been taken over by the various County Governments.
“We also have Saccos that have branches across several counties; creating confusion over it is the National Government or County Governments who are responsible for supervision and registration of such Societies. This is why we are setting up this inter-governmental platform so as to deal with some of these issues,” said Mrs. Mary Mungai- Commissioner for Co-operative Development in the State Department for Co-operatives, Ministry of Industry, Trade and Co-operative.
She added that while Co-operatives have been devolved, certain residual functions are still run by the National Government, including drafting policy for this sector.
This stern warning on non-compliant Co-operative societies has been followed by a warning from Central Bank of Kenya (CBK) and Sacco Societies Regulatory Authority (SASRA) over the re-emergence of unlicensed deposit-taking entities and pyramid schemes.
“The CBK and SASRA wish to draw the attention of members of the public to the re-emergence on unlicensed deposit-taking entities and pyramid/ponzi schemes. Such entities entice members of the public to place money with them and promise quick and abnormally high returns on their money or acquisition of non-existent properties,” said the public notice dated April 6th, 2017.
It added that non-deposit taking co-operatives, governed by the Co-operatives Act, are not authorised to take withdrawable deposits or present themselves to the public as deposit-taking entities.
“Members of the public should exercise caution and ensure they place their funds with credible and duly licensed deposit-taking institutions. The list of licensed deposit-taking financial institutions can be obtained from CBK and SASRA websites,” said the notice.
There are Co-operative societies registered by the Commissioner for Co-Operative Development to mobilise savings from their members and also provide credit facilities against collateral of such savings.

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