The Kenyan government has resumed the registration of new savings and credit co-operative organisations (saccos) after suspending the process a year ago.
The commissioner for co-operative development, David Obonyo (pictured), said the suspension was prompted by “operational and governance concerns” affecting several institutions, including the Kenya Union of Savings and Credit Co-operatives, the umbrella body and apex organisation for all the country’s saccos.
To register, saccos must now have a minimum of 1,000 members, access to at least 1.2 million Kenyan shillings (£6,925, US$9,275) in operational capital, a physical office, at least one clerical employee, and sufficient share capital to sustain operations for at least 12 months.
“In addition,” said Obonyo, “newly registered saccos will be required to demonstrate the ability to mobilise at least Sh10m within their first year of operation. We want saccos that can sustain themselves and protect members’ savings.”
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Speaking during launch preparations for this year’s International Day of Co-operatives, popularly known in Kenya as Shirika Day, Obonyo added: “The process was paused to allow a technical committee to review the legal framework governing saccos. The committee has now submitted its report, and we have resumed registration with stricter conditions.”
Daniel Marube, CEO of the Cooperative Alliance of Kenya, said the co-operative movement is a key pillar in Kenya’s economy, with an estimated 20 million Kenyans belonging to at least one co-operative society or sacco.
“About 75% of the population depends directly or indirectly on co-operative activities,” he added.
Marube urged the government to allow more time for public participation on the proposed new registration system. Kenya has about 14,000 registered saccos but, the government says, only around 4,000 consistently file annual returns. In its current form the new registration will therefore mean that thousands of saccos may not be able to legally operate.
“We support the idea because it promotes quality discussions and better governance. But members need enough time to understand how the system works and why it is necessary,” Marube said. He called for smaller saccos to merge to improve sustainability and competitiveness.
