By Malachi Motano
The Sacco Societies Regulatory Authority (Sasra) says Non-Deposit-Taking Business (NDTB must meet the new Sacco Societies regulations before the 2020June 30, 2021 deadline.
The Sasra acting Chief Executive Officer Peter Njuguna ruled out any extension, warning that non-compliant Saccos will be black listed.
“We have warned members of the public against dealing with any Sacco that will not have complied by the set date because the societies had over a year to prepare for the rules,” said Njuguna.
He said the deadline is set out in the law and cautioned the public whether as individuals, institutions or organisations not to do business with any Sacco which will not have complied with the new regulations by June 30, 2021.
Njuguna said persons including members of the public and public entities that undertake transactions or other businesses with an unauthorised person, entity or Sacco shall be doing so at their own risk and peril.
In addition, the persons involved in such dealing may be liable to criminal prosecutions.
The Non-Deposit-Taking Business Regulations, 2020, not only affect Saccos with physical offices but also those that conduct their businesses virtually.
They include organisations that mobilise members through subscriptions and those that take share capital from persons who are not resident in Kenya.
Njuguna elaborated that the main aim of the regulations is to protect members’ savings following cases of Saccos going under with millions of shillings leaving members penniless.
Also targeted for regulation are the Saccos that mobilize membership and subscription to its share capital through digital or other electronic payment platforms.
Others include those that mobilize membership and subscription to its share capital from persons who are ordinarily resident outside the country
Njuguna regretted that many Kenyans have lost their money to pyramid scheme-like entities operating virtually and purporting to be Saccos by hoodwinking the public to save with them with promises of good returns.
Immediately after mobilizing money from the public, such entities almost always disappear into thin air leaving the depositors with no recourse.
“The new regulations will thus rein in such dubious entities,” Njuguna said.
These regulations also target Non-withdrawable Deposit Saccos, where members get their deposits back after leaving the Sacco but can use them as collateral for loans during the period of membership.
Whereas it has been reported that there are very many Non-withdrawable Deposit Saccos ion the country, the new regulations target only those with deposits worth Sh100 million and above, which have been deemed to present a systemic risk to the government.
The Saccos whose deposits are below Sh100 million, and are neither virtual nor diaspora based, are expected to be overseen by the respective County Government Co-operative Offices where they operate.
This will ensure that there is no room for any SACCO to operate without adequate government oversight.
Since the establishment of Sasra in 2010, it has been supervising and regulating Deposit- Taking Saccos which operates in a banking-like manner and offers similar banking services as those in the mainstream banking sector.
In its (Sasra) official publication as of March 2021, there are 175 DT- Saccos in the country.
However, those that do not undertake banking-like business popularly known as Bosa only or the Non-ithdrawable deposit taking Saccos have never been prudentially regulated until the new regulations were published in May 2020.
The new regulations are expected to bring the designated Non-DT-saccos at par with their DT-saccos counterparts in terms of supervision and regulation, under Sasra, immediately upon the expiry of the.
The Regulator has provided details on its website on how the targeted Saccos can achieve compliance. The Non-DT-Saccos are therefore in race to meet tough new regulations
