By Our Reporter
The Sacco Societies Regulatory Authority
(SASRA) has issued a ‘temporary’
license to 12 Deposit-Taking Saccos
for failure to set prudential guidelines.
This is until July 31, 2017 after which
the regulator will review the status of their
licenses. Among the Saccos that have been
put under close surveillance include Comoco,
Jitegemee, Kenya Midland, Miliki, Moi University,
Nandi Hekima, Neco, Nitunze, Orient,
Rachuonyo Teachers, Telepost and Uchongaji
Sacco Society Limited.
“The list of Sacco Societies granted restricted
deposit-taking license is in accordance
with Section 26(3) of the Sacco Societies Act
Cap 490 for a period of six months ending
June 30 2017,” said John Mwaka, Acting
SASRA Chief Executive Officer.
Saccos that appeared on the SASRA watch
list in 2015 but have had their DT licenses restored
include Ainabkoi, Airports Sacco, Ecopillar,
Good Faith and Trans-National Times
Sacco Societies Limited.
The Saccos that have remained on this
list for the past two years include Comoco,
Telepost, Nitunze Sacco, Nandi Hekima
and Moi University Sacco Society Limited.
In a notice dated January 27, 2017 and
signed by Mr Mwaka, the regulator has revoked
the license of Banana Hill Sacco Society
Ltd while placing Jijenge Sacco Society
Limited under statutory management.
“Members of the public are advised to
desist from undertaking or transacting deposit-
taking Sacco business (FOSA) with
any person, institution or entity unless the
person, institution or entity is licensed by
the Authority as a deposit-taking Sacco Society;
and report any such person, institution
or entity to the Authority or the nearest
police station for appropriate action,” said
So far, SASRA has revoked the Deposit-
Taking licenses of Transcom, Ufundi,
Maono Daima, Greenhills and Nest Sacco
Society Limited. The regulator has also
licensed 164 Sacco Societies to undertake
Deposit-Taking business in Kenya for the
financial year ending December, 31, 2017.
According to the regulator, deposittaking
Saccos which would fail to meet the
minimum requirements already set will be
forced to shut down their FOSA and revert
to back office operations.
Those whose DT licenses have been revoked
will now be under the supervision of
the office of Commissioner of Insurance.
“The issue of placing a deposit-taking
Sacco on a temporary license does not
inhibit its growth contrary to what many
Sacco executives feel is the case. When a
Sacco fails to meet the required minimum
core capital to total assets of 10 per cent,
how can it even roll out new products, expand
its network or even improve the level
of services to members. It is therefore low
capital that restricts growth and this is why
we intervene,” said Mwaka.
He equates a poorly capitalized deposit-
taking Sacco to a car that has no petrol
and cannot therefore be mobile. SASRA
is expected to supervise the revocation of
licenses for those who will be required to
return to back office operations.
Apart from failure to meet the minimum
core capital to total assets thresholds,
the regulator notes that most of the affected
Saccos do not meet the institutional capital
requirements. Others also have corporate
governance issues, a fact that puts members
of the society at a disadvantaged position.
A Sacco society applying for Deposit-
Taking license from SASRA must provide
evidence of having minimum core capital
of Sh10 million by way of a bank statement
in the name of the Sacco Society. This
amount must be maintained at all times.
By Our Reporter