Saccos in titanic battle over Agency Banking


Feb 23, 2017

By Jackson Okoth
Savings and Credit Co-operative Societies
(Saccos) not offering Front
Office Services Activity (FOSA)
could soon take the fight for clients,right
to doorsteps of commercial banks.
This is if the Banking Act is amended
to allow Deposit-Taking Saccos access to
the cheque clearing house.
Saccos that offer FOSA to members
will then be able to enter into the Agency
Banking platform without necessarily
partnering with commercial banks.
Already, Saccos are seeking for alternatives
to the present arrangements
with commercial banks by lining up
with private firms such as Tangazoletu
Limited-the owners of the Spotcash Platform.
“At the moment, Saccos have to partner
with commercial banks in order to offer
Agency Banking services. We are yet
to gain access to the clearing house and
can only offer agency banking services
using someone else’s platform,” said Boniface
Muthama, Chief Executive Officer-
Wanandege Sacco Society Limited.
Although Saccos with FOSA offer
quasi-banking services, they still have
to maintain accounts with a commercial
bank for purposes of receiving and clearing
“Although Saccos have invested in
point of sale (PoS) terminals, they still
have to rely on commercial bank platforms.
Until we have access to the clearing
house, we cannot provide agency banking
services on our own,” said Muthama.
According to provisions of regulation
17 of the Sacco Societies (Deposit-Taking
Sacco Business) Regulations 2010, a
Sacco Society shall not open or operate
an agency outlet without a written prior
approval of Sacco Societies Regulatory
The regulations allow a Sacco to open
an agency outlet, contract another party to
act on its behalf in transacting Sacco business
as well as permit a Sacco Society to
be contracted by a bank to act as an agent
and thus serve bank customers.
An application for approval to the
Authority to open an agency or outlet
must be accompanied by a duly executed
copy of the Agency agreement between
the parties concerned, security features

and space available for carrying out the
Deposit-Taking Sacco business.
“We have already provided the necessary
guidelines for any Sacco interested
in joining the agency banking platform.
The move to join this platform is purely
a business decision that must be made
by the Sacco,” said John Mwaka, Acting
Chief Executive Officer-Sacco Societies
Regulatory Authority.
The list of Deposit-Taking Saccos
joining the Agency Banking platform is
getting longer by the day as these Societies
seek to improve service delivery to
their members.
“We have made the decision to go
into the Agency Banking platform so as
to increase the uptake of our financial
products as well as solve the problem of
members walking long distances in order
to access our branches or a commercial
bank-especially in the lower side of Embu
County where there are no roads and the
population sparse,” said David Kariuki,
Winas Sacco Chief Executive Officer.
Winas Sacco joins a growing list of
Saccos that are already on the Agency
Banking platform.
Kariuki said the Sacco is already in
discussions with Co-operative Bank of
Kenya for purposes of increasing the
network and reach of its products and
services. “We have a vibrant micro
credit segment that is mainly patronised
by members in the informal sector.
These members will easily deposit cash
or access accounts at their own convenience
without coming all the way to
the branch,” he explained.
According to Stephen Mureithi,
Head of Operations and Deputy CEO at
Capital Sacco Society Limited, what a
member needs today is convenience in
accessing a service at the minimal cost.
“Agency Banking provides a Sacco
member with services that would only
be available at the banking hall,” he
Using the Agency Banking Platform,
a member of the Sacco can
handle several things including making
cash deposit and withdrawal, repayment
of bills and transfer funds. They can also
undertake balance enquiry, generate mini
bank statements, collect debit or credit
cards and access mobile phone banking


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