State to dissolve two Saccos for non-compliance

Share

By Staff Reporter
Two Saccos, which cannot be named for legal reasons, will soon be dissolved for non-compliance, State Department for Co-operatives has indicated.
Senior Deputy Commissioner Geoffrey Njang’ombe said they are about to revoke their licenses which will lead to their dissolution.
The move comes at a time when the Government is set to introduce stringent measures in the registration and regulation of societies and ensure security of the members’ deposits.
Once liquidated, the two can neither operate the Back Office Services Activity (Bosa) nor the Front Office Services Activity (Fosa).
“The Fosa and Bosa are so intertwined and it is unlikely to be financially sound at all to run one only,” he said, adding that the decision is meant to avoid litigation costs, further losses besides securing any asset.The decision, he argued is in accordance with the provisions of law which they cannot fail to comply with.
He stated that whatever money the society has is connected to deposits and even the advances one gets are tied to the deposits.
This decision was arrived after an onsite inspection was conducted by the regulator and the relevant authorities and concluded that the societies cannot be revived.
“Any inquiry comes with clear recommendations and for the above two, it suggested that they be dissolved,” he said.
The Sacco Societies Regulatory Authority (SASRA) indicated in its 2016 annual supervision report that it had extended the licence of 11 Deposit-Taking Saccos that had failed to meet set prudential guidelines.
The affected saccos were allowed to operate on a temporary license until December 2017 when the regulator was to again review their liquidity, governance and capital adequacy status.
Some Deposit-Taking Saccos were under surveillance by SASRA as their permits expired on 31st July 2017.
Some were provided with a caution and give room for reforms and to correct some structures.
“There are those the commission is assisting to revive as per the recommendations and one of them is being revived,” he said.
Some of the societies that are put under the Government radar have no proper structures and no procurement committee in place besides having governance challenges.

Leave a Reply

Your email address will not be published. Required fields are marked *