Non-deposit taking Saccos
Agriculture, Livestock, Fisheries and Cooperatives, CS Peter Munya

Summary

  • Non-deposit taking Saccos are now required to file their business details with Sasra within 30 days since the publication of the notice on 29 January 2021
  • According to data from the industry, non-deposit taking Saccos in Kenya command a total asset base of Sh188 billion; loans worth Sh137 billion; and manage customer deposits valued at Sh140 billion.
  • “Fraudsters and fraudulent schemes normally styled as SACCOs, are therefore put on notice that the government will soon catch up with them,” noted Agriculture, Livestock, Fisheries and Cooperatives CS Mr Peter Munya.

A new regulation is promising to bring to a stop the era where some Saccos in Kenya are run in a manner akin to a Ponzi scheme, resulting in the loss of millions of shillings of members’ savings.

The sector watchdog, the Sacco Societies Regulatory Authority (Sasra), is targeting to bring in over 3,600 non-deposit taking Saccos which have a collective membership of about 1.5 million under its surveillance by June 30, this year.

The move follows the publication of the Sacco Societies (non-deposit taking business) regulations, 2020, which took effect on January 1, 2021.

“We believe that bringing these non-deposit taking Saccos under the regulatory oversight of Sasra will extend the benefits of regulated savings and loan services to more Kenyans while improving the stability and resilience of the sub-sector,” said Sasra chairman John Munuve. 

Mr Munuve was speaking during a meeting with the Cabinet Secretary, Agriculture, Livestock, Fisheries and Cooperatives, Peter Munya, where the call for Sasra to regulate Non-Deposit Taking SACCOs currently holding members’ deposits above Sh100 million was made.

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Also targeted under the new regulations are non-deposit taking Saccos, which get their share capital through digital payment platforms; as well as those that collect money from members in the diaspora.

Non-deposit taking Saccos are now required to file their business details with Sasra within 30 days since the publication of the notice on 29 January, 2021.

At the moment, Sasra regulates 172 deposit taking Saccos, giving their members better protection of their rights while also providing resilience and stability to the financial services institutions.

According to data from the industry, non-deposit taking Saccos in Kenya command a total asset base of Sh188 billion; loans worth Sh137 billion; and manage customer deposits valued at Sh140 billion.

“Fraudsters and fraudulent schemes normally styled as SACCOs, are therefore put on notice that the government will soon catch up with them,” noted Mr Munya.

Non-deposit taking Saccos refer to those that take deposits from members only in the form of share capital. These savings are refundable to members, who choose to leave the Sacco.

On the other hand, deposit-taking Saccos not only collect savings and give loans to members but also actively mobilize and receive withdraw-able deposits popularly known as Fosa (Front Office Service Activity) in Kenya.

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