Senators grill CS Oparanya over delays in SACCO safety fund

Cabinet Secretary for Co-operatives and Micro, Small and Medium Enterprises (MSMEs) Development, Wycliffe Oparanya, was on Wednesday questioned by Senators over key government programmes affecting SACCO members, women, and youth across the country.

Appearing before the Senate plenary, Oparanya responded to tough questions, particularly from nominated Senators Joyce Korir and Karen Nyamu, who demanded clear answers on government funding, legislative reforms, and empowerment strategies for vulnerable groups.

Why the Delay in Launching SACCO Deposit Fund?

Senator Karen Nyamu raised concerns about the delayed launch of the SACCO Deposit Guarantee Fund, which is meant to protect SACCO members from losing their savings in case of collapse.

Oparanya admitted the delay, blaming it on legal and institutional gaps.

“There is no legal framework yet to allow the Fund to build reserves before making payouts. Also, we lack trustee protection,” he said.

However, he assured the House that the Cabinet had already approved the SACCO Societies (Amendment) Bill, 2024, which will address the legal barriers. Regulations for the Fund are ready and awaiting parliamentary approval.

SACCO Deductions Not Remitted

Senator Nyamu also demanded answers on the problem of non-remittance of SACCO deductions by employers.

“As of March 2024, over Sh4.4 billion in SACCO deductions had not been remitted by public institutions, including county governments and universities,” Oparanya disclosed.

To address this, the CS said the SACCO Societies Regulatory Authority (SASRA) is working with the Kenya Revenue Authority (KRA) to issue agency notices and recover funds. The Ministry is also engaging the Council of Governors for a long-term solution.

Hustler Fund Defaulters and Credit Scores

Senators also sought clarification on how the Hustler Fund determines borrowers’ credit ratings and what is being done about loan defaulters, who now make up 58 percent of borrowers.

Oparanya said credit scores are based on repayment behaviour, with reliable borrowers receiving higher limits and access to training and formal financing.

“For example, those rated A1 can borrow more and are eligible for financial literacy training,” he said.

He acknowledged the challenge of loan defaults but insisted the Fund was still benefiting millions of Kenyans. Of the 20 million borrowers, 2 million have been consistent and rewarded with increased limits and support.

Where Is the Support for Rural Women?

Senator Joyce Korir pressed Oparanya to explain what the Ministry has done to support women in rural and marginalized communities.

“Can the Cabinet Secretary outline interventions the Ministry has put in place to promote inclusion and empowerment of women in rural and marginalized areas, including specific support to vulnerable and disadvantaged groups, and strategies for monitoring and evaluation?” she asked.

In response, Oparanya listed several ongoing programmes, including the Uwezo Fund, Hustler Fund, and capacity-building efforts through government agencies.

“The Hustler Fund is one of the key programmes empowering women in MSMEs. So far, it has disbursed Sh70.09 billion to 25.65 million Kenyans, with 48 percent being women,” said Oparanya.

He added that the Fund is designed to promote financial inclusion by removing barriers such as collateral and credit history checks. The Uwezo Fund, he noted, had disbursed over Sh5.3 billion to more than 53,000 women’s groups by February 2024.

Oparanya also said the Ministry works closely with elected leaders, administrative officers, and Women Representatives to reach rural women. Sensitisation forums have already been held in counties like Marsabit, Kakamega, Murang’a, and West Pokot.

“We plan to roll out the ‘MSMEs Connect’ forum across all counties starting June, beginning with Embu, in collaboration with the Council of Governors,” he said.

Senators urged the Ministry to promote awareness of available government support programmes for women and youth, especially in remote areas.

They also called for a detailed legal and impact assessment of the Hustler Fund, raising concerns about transparency and the actual impact on grassroots communities.

Senator Edwin Sifuna (Nairobi) asked, “What plans are in place to recover money from the 58 percent of borrowers who have defaulted?”

In response, CS Oparanya said the government is developing a system to recover the loans and ensure more Kenyans benefit.

“Kenyans must repay what they borrowed. This is a good initiative that can change lives if used well,” he said.

He promised to submit full Hustler Fund records to the Senate and requested an informal session with Senators to further discuss the programme.

Author: Andrew Walyaula

Andrew Walyaula is a seasoned multimedia journalist. satrendmagazine@gmail.com