During a Cabinet meeting chaired by President William Ruto in March this year at State House, key amendments to the Sacco Societies Act, 2008, were approved in a bid to enhance the stability, efficiency, and competitiveness of the country’s Savings and Credit Cooperatives Societies (SACCOs).
The proposed reforms, which are outlined in the Sacco Societies (Amendment) Bill, 2023, currently before Parliament, aim to modernize financial and technological operations, particularly benefiting the SACCO sector.
These key reforms include, among others, a SACCO Shared Services Framework that will allow the financial institutions to pool resources, adopt fintech solutions, and enhance cooperation while maintaining operational independence, and a centralized data repository that will improve regulatory oversight and efficiency.
ALSO READ:
Malava Financial Services CBO to digitize its banking services
Additionally, the establishment of a Central Liquidity Facility (CLF) will facilitate inter-SACCO transactions, short-term lending, and participation in the National Payment System.
A key reform in this, if the amendments are endorsed by parliament, is that it will allow SACCOs to participate in the National Payment System, that is, the clearinghouse.
This will be a big win and breakthrough for SACCOs since moving forward, SACCOs, just like banks, will now clear cheques, a service that they currently depend on from commercial banks, and further introduce new products that will suit their market base and reach the common citizen easily.
ALSO READ:
Indeed, these reforms are long overdue. Thus, the ball is in the Members of Parliament’s court to ensure the amendments are enacted into law once they are introduced in the house and not just left to gather dust in the archives, denying the citizens the benefits of the reforms they urgently crave.
Last but not least, the reforms to the Deposit Guarantee Fund will ensure better protection of SACCO deposits, reduce government bailout risks, and strengthen the cooperative financial sector, something that is long overdue considering the emerging trends in the SACCO sub-sector, where a good number of SACCOs have gone under with the hard-earned savings of their members.
Get more stories from our website:Sacco Review.
For comments and clarifications, write to: Saccoreview@
Kindly follow us via our social media pages on Facebook:Sacco Review Newspaperfor timely updates
Stay ahead of the pack! Grab the latest Sacco Review newspaper!
