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Parliament welcomes radical amendments to Sacco law

BUSINESS
By Lee Mwiti | Jul 7th 2018 | 2 min read
By Lee Mwiti | July 7th 2018
BUSINESS

A controversial bill that seeks to overhaul how Saccos operate has made its way into Parliament.

The Sacco Societies (Amendment) Bill, 2018, which intends to bring changes to the Sacco Societies Act, 2008, was introduced through a first reading in the National Assembly on Thursday by Leader of Majority Aden Duale.

To begin with, the Bill seeks to open Saccos to membership by outsiders who have no savings in any Sacco. These “outsiders” who go by the term ‘social impact members’ will be allowed only to vote on certain issues affecting them, and will not have to attend all the meetings like the other members.

The proposed law, however, has faced fierce opposition from members of the Co-operative Alliance of Kenya (CAK), who feel that the Bill is giving licence to outsiders to take over the cooperative movement in Kenya.

CAK recently said it was a takeover ploy by the so-called social impact members who even have no idea how the cooperative movement works.

“The so-called “Social Impact Members” shall, to the exclusion of other members of the society, only vote on resolutions relating to the Special Fund, the Investment Committee, the Special Fund Trustee and matters incidental thereto. This simply means that this special class of members only vote in matters concerning them and to the exclusion of the rest of the members,” the statement read.

Also, the Bill recommends amendments that seek to further expand the current credit information sharing mechanism to include Sacco societies with other licensed financial institutions.

“Under the proposed amendment, Sacco Societies will be mandated to share Credit Information with the Credit Reference Bureaus (CRBs) licensed and regulated by the Central Bank of Kenya,” Duale said

“This means that the Sacco Societies will no longer need to obtain their customer consents before sharing information with the bureaus.”

 

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