The new Sacco regulations will help curtail unscrupulous people running pyramid schemes, Kenya Union of Savings and Credit Co-operatives (Kuscco) chief operating officer James Ole Kiti has said.
“All non-deposit taking Sacco holding deposits worth Sh100 million and above will be subjected to the new regulations. They should apply for an authorisation to operate from the Sacco Societies Regulatory Authority (Sasra) before June,” Ole Kiti said.
He said the other small Saccos, whose deposits do not exceed Sh100 million, will remain under the supervision of the county departments of cooperatives.
He was speaking on Saturday during the Qwetu Sacco Annual Delegates Meeting in Voi, Taita Taveta County.
The new regulations were gazetted on January 1, 2021, and Saccos have up to June 30 to comply. Those that fail to meet the June 30 deadline will be shut.
Diaspora Saccos with links to Kenya will also be policed by the regulator under the new law.
The Saccos have been instructed to provide critical information and business plans to Sasra for monitoring by June.
“There are a number of saccos mobilising deposits on social media but they do not have a physical office. The regulations aim at dealing with such mushrooming societies,” he added.
He further warned Kenyans against investing in schemes that promise high short-term returns or dividends to investors, noting that most of them are out to deceive the public.
Qwetu Sacco chairman Alfred Mlolwa said under the Sasra regulations, Saccos will be able to maintain liquidity as dividends shall be determined by the regulatory body.
“The regulatory body has helped Saccos maintain the cash liquidity level. It has also helped Sacco boards stick to their core mandate,” Mlolwa said.
He encouraged other Saccos to adhere to the new regulations.
Sasra regulates about 175 deposits taking Saccos in the country with a total member deposit base of Sh425 billion as of December, 2020, having grown from Sh381 billion in 2019.
Sasra is targeting to register at least 300 Saccos across the country, where there are at least 3,626 identified ones.
The 300 account for 70 per cent of the Sh188 billion in assets and Sh140 billion in deposit.