Sacco Society Regulatory Authority (Sasra) has warned the public against undertaking any related Savings and Credit Co-operative (Sacco) business with those entities that are not registered and regulated by the Authority.
In a recent Public Caution issued by Chief Executive Officer (CEO) Peter Njuguna, the Authority has observed that a large section of members of the public continue undertaking Sacco-related businesses with such unauthorized entities, warning that the public will be on their own if such entities fail to meet their obligations.
“SASRA’s attention has continued to be drawn to the fact that a large section of the members of the public and institutions are still undertaking Regulated Sacco businesses with entities which are neither licensed nor authorized to do such business as provided in the SACCO Societies Act and Regulations made thereunder,” said Sasra in the notice.
“SASRA hereby puts on notice, all members of the public including public and private sector employer-institutions against undertaking Regulated Sacco business with unauthorized entities, whether styled as Saccos or not; and any such illegal Regulated Sacco business shall be at the persons’ risk and peril,” added the notice.
According to the Authority, it has equally noted a trend in which some public and private sector companies, institutions and entities are facilitating unauthorized entities to undertake Regulated SACCO business by making deductions from salaries or wages or other income of their employees, and remitting the same to such unauthorized entities; and/or providing electronic and digital channels through which public funds are paid to and/or from the unauthorized entities.
“These incidences have often resulted in and/or occasioned the loss of funds by members of the public without any recourse, whenever such unauthorized institutions fail to meet their financial obligations,” stated Sasra.
The Authority’s CEO has therefore advised all members of the public to always exercise caution and undertake the requisite due diligence before placing or authorizing the placement of their funds or monies or deposits or savings with any entity presenting itself as undertaking Regulated Sacco business, adding that the Saccos licensed and authorized to undertake Regulated Sacco business is available for download from SASRA’s website.
The Authority has clarified that Regulated Sacco business means all deposit-taking Sacco businesses popularly known as FOSA (Front Office Service Activity) business which mostly are undertaken by licensed DT-Saccos, and the specified non-deposit taking businesses popularly known as BOSA (Back Office Service Activity) business for all SACCOs whose non-withdrawable (BOSA) deposit (savings) liabilities are equal to or in excess of Kshs100 Million, whose membership are principally drawn from persons who are not ordinarily resident in the country (popularly known as Diaspora SACCOs), and which principally mobilizes savings from members using electronic channels (popularly known as Digital Saccos).
Last month of January, the Authority revoked two DT-Saccos namely the Kenya Midland Sacco Society Limited in Bomet and Jacaranda Sacco Society Limited in Kiambu by not renewing their license for the period commencing January 1, 2024, to December 31, 2024.
In the Notice, Njuguna explained that the two societies failed to undertake deposit-taking business in the past year after their licences expired two years ago with the decision to revoke their license being in line with Regulation 6 of the Sacco Societies Act which states the requirements of issuance of a license.
“A Sacco society which fails to commence deposit-taking Sacco business within twelve months of the grant of a license under this Act shall if it still proposes to operate such business, make a fresh application under section 24,” reads part of the Act.
Njuguna indicated that the two Sacco’s licences were not renewed upon expiry on December 31, 2022, and thus stand revoked.
Sasra warned that it is an offence punishable by the prosecution under the Act and the Regulations for any person to conduct or undertake a deposit-taking Sacco business and/or specified non-deposit taking Sacco business, with any Sacco Society or entity, unless the Sacco Society has been duly licensed or authorized by the Authority.
“Every licensed or authorized Sacco Society is required by law to all times, display the original license or authorization certificate (as the case may be) in conspicuous place at their registered Head Offices, and a copy thereof at all other licensed or authorized places of business,” said Njuguna in the notice.
In the notice, Njuguna also listed close to 300 Saccos whose licences were renewed to operate deposit and non-deposit-taking businesses.
Co-operatives Cabinet Secretary Simon Chelugui had earlier issued a stern warning to those involved in fraudulent activities, stating that anybody who will be found to have engaged in fraudulent activities will face the full wrath of the law.
By Sacco Review reporter
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