The Standard Group Plc is a multi-media organization with investments in media platforms spanning newspaper print operations, television, radio broadcasting, digital and online services. The Standard Group is recognized as a leading multi-media house in Kenya with a key influence in matters of national and international interest.
  • Standard Group Plc HQ Office,
  • The Standard Group Center,Mombasa Road.
  • P.O Box 30080-00100,Nairobi, Kenya.
  • Telephone number: 0203222111, 0719012111
  • Email: [email protected]

New dawn for Saccos as regulator assures on member savings safety




Kenya Union of Savings and Credit Co-operatives CEO George Ototo (right) with Sacco Society Regulatory Authority boss Peter Njuguna in Mombasa yesterday. [Kelvin Karani, Standard]

The government will tighten regulation to ensure members’ funds are safe in Savings and Credit Cooperatives (Saccos).

Sacco Societies Regulatory Authority (Sasra) chief executive Peter Njuguna said relevant policies will be reviewed to secure the Sh800 billion industry.

“We are enhancing the regulatory framework to make sure Saccos not only grow but that there is also a secure environment to operate. We also want to ensure loans given out by Saccos are recovered,” said Njuguna.

The official, who spoke on Wednesday in Mombasa during the annual convention that brought together more than 360 Saccos, said the regulator withdrew licenses of four cooperatives last year after they failed to meet qualifications.

Saccos officials said they will roll out a framework that will enable them work together in securing their members through the digital space and other platforms even as they fight to safeguard their market share in the financial sector. Njuguna said Saccos hold Sh800 billion in assets funded by members’ deposits, shares, and retained earnings, adding: “The government has underscored the importance of protecting these assets because they are significant to the GDP. We are talking about a contribution of 7.25 per cent to the country’s GDP by Saccos as of December 2020.

We expect this contribution will go up to 7.5 per cent this year.” Njuguna said 15 Saccos have closed down since 2011 due to competition and failure to meet the requirements.

“This year, we didn’t renew the licenses of four Saccos. We gave them conditions that they were to address in the last three years but they failed. In the end, we had to make a decision as per the law. We asked them to fold or merge,” said Njuguna. He said most Saccos that closed shop in the last 12 to 15 years have done so mostly due to competition.

“In the last decade, we have seen a lot of competition in the industry. This competition has been brought about by technology and policy actions,” said Njuguna.

He added: “Members of Saccos need a safe place to put their money and access loans when they need them. There will be increased competition in the sector when there are others who can offer the loans in a timely manner.”

He said larger Saccos account for 72 per cent of the Sh800 billion money and assets held by the deposit-taking Saccos.

“This forum is significant because as Saccos grow, they collaborate in shared services. It eases the burden of business,” Njuguna said adding: “The law allows for a restricted license but it cannot be forever.”

Safaricom Sacco CEO Joseph Njoroge called on the organisations to digitise their services if they hope to meet members’ needs.

“Safaricom Sacco boasts 13,000 members out of which 2,000 are diaspora members, who access services online,” Njoroge said. State Department of Cooperatives PS Ali Noor Ismail said Saccos are a key segment in the socio-economic transformation of the country.  

“The sub-sector is the most vibrant and fast-growing segment within the cooperative sector and cuts across all sectors of the economy,” said Ismail.

Related Topics


Similar Articles


Recommended Articles