New watchdog to oversee deposit-taking saccos

The newly instituted saccos regulator is, in two weeks, set to move in and instil order in Kenya’s fastest growing financial services segment.

Cooperatives minister Joseph Nyaga said on Monday that the government had enacted the Saccos Society Act 2008 that gave teeth to the Sacco Societies Regulatory Authority to license and regulate operations of the deposit-taking groups.

Mr Nyaga said saccos had mobilised savings of about Sh180 billion, which represented 32 per cent of national savings with an asset base of Sh200 billion.

The new regulations, he said, would provide for a deposit guarantee fund to safeguard and cushion members in the event a sacco collapses.

The minister said the government recognised the importance of the sector as part of the wider financial industry and sought to develop an efficient and professionally managed cooperative financial services system.

“Saccos have an advantage as their clients are shareholders and hence should undertake aggressive deposit mobilisation, creation of internal incentives to attract savings and insurance cover programmes.”

Mr Nyaga was addressing the 33rd annual meeting of the Metropolitan Teachers Sacco, formerly Kiambu Teachers Sacco in Kiambu.

In the 2008/2009 financial year, the sacco’s deposits rose from Sh284 million to Sh331 million and the share capital from Sh710 million to Sh832 million.