Government Moves to Tighten Sacco Regulations Amid Rising Public Concern » Capital News
NAIROBI, Kenya Feb 23 – The government is set to implement stricter regulations in the Sacco sector to curb financial mismanagement and restore public confidence.
Principal Secretary for Cooperatives and MSMEs Patrick Kilemi announced the reforms on Thursday during the official opening of Nyati Sacco Plaza in South C, Nairobi, emphasizing the need for stronger oversight and governance.
The move comes in response to growing concerns over financial mismanagement within the sector, which has eroded public trust. Kilemi revealed that as part of the government’s commitment to strengthening oversight, the Cooperative Bill 2024 has been tabled before the Senate.
If Parliament approves, the bill will introduce critical reforms to protect member deposits and ensure greater transparency in Sacco operations. It is also expected to address poor governance, which has plagued the cooperative movement.
“I can report that last week, our Cooperative Bill 2024 was read in the Senate for the first time and forwarded to our Committee of Cooperatives for further review before the second reading. The National Assembly has already approved it,” Kilemi said.
He further stated that Kenya’s cooperative laws have not been fully aligned with the 2010 Constitution, making it necessary to reform the sector as a devolved function. According to Kilemi, an agreement between national and county governments has helped delineate functions to improve efficiency and service delivery.
“The cooperative sector remains a cornerstone of Kenya’s socio-economic development, significantly contributing to financial inclusion, wealth creation, and poverty alleviation. Saccos continue to play a crucial role in mobilizing savings, providing affordable credit, and fostering economic self-reliance among Kenyans,” he added.
His comments come amid public outrage over allegations of mismanagement at the Kenya Union of Savings and Credit Cooperatives (KUSCCO). The scandal has intensified calls for stricter accountability measures in the sector.
Kilemi urged cooperatives to actively participate in shaping policies that promote democracy within Saccos and enhance governance and accountability, ensuring an end to unchecked leadership.
On his part, Nyati Sacco Chairman Charles Mbuvi said the launch of Nyati Sacco Plaza reflects the institution’s commitment to innovation and the socio-economic transformation of its members.
“This building is more than just bricks and mortar; it is a powerful symbol of our unwavering commitment to our members and a testament to our vision for a future defined by growth, innovation, and community impact. Our investment in this infrastructure is, above all, an investment in you—our members,” Mbuvi stated.
PS Kilemi commended Nyati Sacco for its steady growth and expansion, acknowledging its resilience and impact in transforming the lives of Kenyans. He was accompanied by Commissioner for Cooperatives David Obonyo, Nyati Sacco CEO Dr. Julius Bett, and other industry stakeholders.
Founded in 1980 by employees of Securicor Security Services (now G4S Security Services), Nyati Sacco has grown into a leading financial institution with a membership of over 30,000.