State taps new team to review Sacco laws

Cooperatives and MSME Development CS Wycliffe Oparanya during a meeting with the National Assembly's Committee on Trade, Cooperatives and Industry over the 2025 Budget Policy Statement at Bunge Towers, Parliament. February 24th, 2025. (Elvis Ogina, Standard)

The government has enlisted the expertise of foreign SACCO executives to sanitise the local sector, following financial improprieties that have plagued the Kenya Union of Savings and Credit Co-operatives Ltd (KUSCCO).

Cabinet Secretary for Co-operatives and Micro, Small and Medium Enterprises Development (MSMEs), Wycliffe Oparanya, announced in a statement that he has appointed a committee of experts tasked with reviewing the laws governing the SACCO sector.

The seven-member team will also review KUSCCO's new constitution. The organisation is currently undergoing restructuring after its former management was implicated in a Sh13 billion scandal that has impacted member SACCOs, despite them recording profits on paper.

CS Oparanya revealed that the team will be chaired by Marlene Shiels, Chief Executive of Capital Credit Union, Scotland. The committee also includes Maurice Smith from the African American Credit Union Coalition (AACUC), who is also a member of the US Supreme Court.

Other members are Collins Harrison, an advocate of the High Court of Kenya specialising in constitutional and human rights law; Dr Gamaliel Hassan, Chief Executive of Stima DT SACCO; and Dr Nelson Kuria, Chairperson of CIC Insurance Group.

The committee will be supported by Morris Mworia and John Ong'atta as technical staff. Their appointment will last for three months.

"The committee has been tasked with, among other objectives, evaluating and proposing amendments to the Act to align with recent Cabinet approvals," said CS Oparanya.

The team will also explore the establishment of a Central Liquidity Fund, the creation of a SACCO deposit guarantee fund to safeguard members' savings, and the development of a shared services legal and administrative framework.

The committee's appointment coincided with the inauguration of KUSCCO's new board, who will serve for a two-year term effective from 16 April 2025.

The incoming board is expected to steer restructuring efforts aimed at improving efficiency and governance, recovering assets, and preparing KUSCCO for its transition into a federation.

David Mategwa, who served as interim chair over the past year, has been retained in the same role. Mr Mategwa also chairs the Kenya National Police DT SACCO.

"These appointments are intended to strengthen the SACCO movement in Kenya and enhance KUSCCO's stability, accountability, and service delivery for the benefit of all SACCOs nationwide," said CS Oparanya.

He reiterated the government's commitment to supporting reforms that will improve the resilience and sustainability of the SACCO sector.