The SACCO Societies Regulatory Authority (SASRA) has sounded the alarm over a deepening non-remittance crisis that threatens the financial stability of Kenya’s regulated SACCOs.
In its SACCO Supervision Annual Report 2024, the regulator revealed that employer institutions, many of them government-linked have failed to remit over Ksh 3.49 billion in member deductions, up from Ksh 2.59 billion in 2023.
The bulk of the debt is owed by county governments, public universities, and state corporations, with counties alone withholding nearly Ksh 1.69 billion. These funds, deducted from employees’ salaries for loan repayments and savings contributions, never reached the SACCOs, and this may in turn cripple their liquidity and undermine their ability to issue loans, which remains their core business.
SASRA warned that unless the issue is urgently addressed, SACCOs will continue to suffer both short- and long-term financial strain. The Authority is now pushing for legal and policy reforms that would allow the National Treasury to directly deduct the owed amounts from exchequer allocations due to defaulting institutions.
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“These monies can be easily recovered from the exchequer grants instead of following lengthy and tedious legal proceedings, while the affected SACCOs continue to suffer,” the report stated.
The crisis is not only affecting SACCO operations but also putting members at risk. According to SASRA, failure to remit Back Office Savings Activity (BOSA) deductions reduces the amount of credit a member qualifies for. Even more damaging is the non-remittance of loan repayments, which falsely portrays members as defaulters leading to strained relations with their SACCOs.
SASRA estimates that over 55,000 Kenyans have already been affected by the crisis.
SASRA’s call for reform comes at a time when Kenya’s SACCO sector is gaining global recognition. According to the World Council of Credit Unions (WOCCU), Kenya ranks 14th worldwide in total SACCO assets and leads Africa in cooperative finance. But without urgent intervention, the non-remittance crisis could erode the gains made and stall the sector’s momentum.
By Masaki Enock
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