Members of the National Assembly Departmental Committee on Trade, Industry and Cooperatives have called for stronger safeguards in the proposed law governing Savings and Credit Cooperative Societies (SACCOs), saying the legislation should better protect members’ savings without creating unnecessary bureaucracy.
The committee, chaired by Ikolomani MP Bernard Shinali, met officials from the SACCO Societies Regulatory Authority (SASRA) to consider the proposed Sacco Societies (Amendment) Bill, 2025, which seeks to strengthen regulation of SACCOs and enhance the protection of members’ deposits.
During the meeting, legislators cautioned against introducing excessive administrative requirements that could make SACCO operations more complicated. They noted that SACCOs remain the preferred source of affordable credit for many Kenyans, particularly during emergencies, because of their simple and accessible lending processes.
The lawmakers also raised concerns over the proposed deposit insurance framework, which would compensate depositors up to Sh100,000 if a SACCO collapses. They argued that the proposed compensation limit would leave members with larger savings exposed to substantial losses and called for a more equitable compensation model.
The committee further urged SASRA to ensure the proposed legislation is forward-looking and capable of addressing the changing needs of the cooperative sector. Members recommended that operational issues be addressed through regulations where appropriate instead of embedding every reform in law, saying this would provide greater flexibility when implementing future changes.
The proposed Bill seeks to strengthen prudential supervision and oversight of SACCOs, improve the safety of members’ savings and deposits, and enhance the sustainability of cooperative societies, particularly smaller institutions.
It also proposes the adoption of shared technological and digital platforms to enable smaller SACCOs to reduce operational costs, improve efficiency and benefit from economies of scale.
Appearing before the committee, SASRA Chief Executive Officer David Sandagi said the proposed law would strengthen public confidence in SACCOs by establishing a deposit insurance fund to safeguard members’ savings in the event that a regulated SACCO becomes insolvent.
Sandagi said although SASRA has invested heavily in technology to improve supervision, many smaller SACCOs have been unable to adopt similar systems because of financial and technical limitations.
He said the proposed amendments would allow such institutions to access shared regulatory technology platforms, making supervision more effective while lowering compliance costs.
Author: Andrew Walyaula
Andrew Walyaula is a seasoned multimedia journalist. Email: waliaulaandrew0@gmail.com
