Oparanya: Dormant and Weak Saccos Face Deregistration

Kenya’s Sacco sector, a financial backbone for millions, is now under tighter scrutiny as the government signals possible deregistration and liquidation of dormant societies.

Speaking at the launch of the 2024 Annual Supervision Report prepared by the Sacco Societies Regulatory Authority (SASRA), Co-operatives and MSME Development Cabinet Secretary Wycliffe Oparanya warned that Saccos failing to comply with regulatory requirements risk being struck off the register.

Dormant Saccos on the Spot

According to Oparanya, societies that exist only on paper or fail to file their returns will face deregistration. Some may even be merged or consolidated as part of a broader clean-up exercise aimed at strengthening the cooperative movement.

“The law requires that Saccos be active and accountable. Those that are not will be liquidated,” he said.

Membership Growth Amid Challenges

The latest report shows that Sacco membership grew to 7.3 million in 2024, up from 6.8 million in 2023. Out of these, 5.7 million are active members, while 1.6 million remain dormant.

• Deposit-taking Saccos account for 6.8 million members.

• Non-deposit-taking Saccos account for about 514,000 members.

Despite the growth, the number of registered Saccos slightly dropped to 356 by the end of 2023, a figure that could fall further if the government proceeds with consolidation.

Accountability and Governance

The CS also put Sacco auditors on notice, accusing some of aiding mismanagement by failing to detect fraudulent financial reporting. Both internal and external auditors will now face closer monitoring, with possible sanctions for those who fail to meet professional standards.

“Accurate financial reporting is non-negotiable. Auditors who fail in their duty will be referred to the Institute of Certified Public Accountants of Kenya (ICPAK) for action,” Oparanya said.

Additionally, the ministry is considering new policies to regulate how board members are selected, ensuring stronger governance structures in the sector.

Sacco Sector Hits Ksh. 1 Trillion Asset Base

Despite the governance concerns, the Sacco sector has achieved a major milestone, with combined assets surpassing Ksh. 1.07 trillion in 2024. Analysts say this underlines the importance of Saccos in supporting small businesses, farmers, and salaried workers across the country.

For ordinary Kenyans, the crackdown means dormant Saccos could soon disappear, while active ones may see stricter regulation to protect members’ savings. Experts argue that the move could boost public confidence, especially at a time when Saccos remain a key alternative to commercial banks.

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