The State-appointed team has opposed trading of Savings and Credit Cooperative Organization (SACCO) shares between members or on the National Securities Exchange (NSE), warning that the practice compromises the spirit of ownership and long-term participation.
This comes on the back of a push by NSE for listing of Saccos on the stock market to boost trading and unlock millions of shillings of share capital forfeited by former Sacco members on the grounds that they are non-refundable and can only be transferred to an existing member.
NSE officials had said in November 2025 that talks were ongoing with key stakeholders, including government policy makers, regulators, Sacco leadership, and members, to start trading Sacco shares on the bourse. This move, NSE officials argued, would give former Sacco members and those intending to terminate their membership a chance to sell their stake in an open market and at a competitive price.
The team appointed by Co-operatives and Micro, Small and Medium Enterprises (MSMEs) Development Cabinet Secretary (CS) Wycliffe Oparanya, however, said the practice of trading Sacco shares between members or on the NSE deviates from the co-operative principle of member ownership and long-term participation.
The committee pointed out that globally, credit union shares are nominal, typically non-transferable, and redeemable only by the institution.
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“Trading on the NSE is expected to bring about confusion for members and is not likely to be in their best interests due to costs incurred to trade or poor trading conditions. However, given the scale of “locked in” savings in the Kenyan Sacco system currently, it is important that members who have share capital, which they cannot access, should have a vehicle to “trade” those shares,” the committee said.
This committee, which is chaired by UK-based Capital Credit Union CEO Marlene Shiels, said any vehicle created to trade Sacco shares, whether on the NSE, should ensure that members’ interests are paramount.
“Sacco shares, or share capital, function as the core equity capital of the institution, representing ownership rather than a liquid savings account.” The team said, adding that share capital is considered permanent equity and generally not withdrawable while a member is active in the Sacco, but even if one opted to exit, one cannot simply withdraw the amount. Instead, they must transfer it to another willing member or back to the Sacco, if allowed.
The team said that heavy reliance on member share capital to meet core capital requirements can create liquidity constraints and limit institutional flexibility.
“Internationally, credit unions diversify their capital base through retained earnings, reserves, and institutional capital,” it said.
Shiels’ committee was tasked to review the legislative and regulatory framework, propose reforms to strengthen deposit protection and liquidity management, develop pathways for harmonisation of oversight across all Saccos, and benchmark Kenya’s system against global best practices.
By Juma Ndigo
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