The Government has resumed the registration of Savings and Credit Cooperative Organisations (SACCOs) after a temporary suspension aimed at reviewing the sector’s legal and operational framework, Commissioner for Co-operative Development, David Obonyo, has announced.
Speaking during the launch of preparations for this year’s International Co-operative Day celebrations, Obonyo said the annual event, locally known as ‘Ushirika Day’, will culminate in a national celebration on July 4 at Uhuru Park in Nairobi, following county-level activities across the country.
This year’s theme, “Cooperatives for a peaceful world”, focuses on how cooperatives can promote peaceful coexistence, economic empowerment, and social cohesion among diverse communities.
Obonyo said the government suspended the registration of new SACCOs in May last year after several institutions, including Kuscco, Metropolitan SACCO, and Ushuru SACCO, faced operational and governance challenges.
“We felt it was important to pause the registration process and allow a technical committee to review the legal framework governing SACCOs,” he said.
“The committee has now submitted its report, and we have resumed registration with stricter conditions aimed at ensuring only viable and stable SACCOs are licensed. Under the new guidelines, SACCOs seeking registration must demonstrate access to at least Sh1.2 million in operational capital before they can begin operations,” he added.
Obonyo said the requirement is intended to prevent institutions from relying on members’ deposits to fund administrative expenses, noting, “We want SACCOs that can sustain themselves and protect members’ savings,” he said. “Every SACCO must also have a physical office, staff, and proper operational structures.”
In addition, he said newly registered SACCOs will be required to demonstrate the ability to mobilise at least Sh10 million within their first year of operation.
Obonyo noted that although Kenya has approximately 14,000 registered SACCOs, only about 4,000 regularly file annual returns, raising concerns over the viability of many of them.
“That is why we are enhancing the registration threshold, so that Kenyans can have confidence that their money is safe,” he said.
The Commissioner also defended the government’s directive requiring SACCOs with more than 5,000 members to adopt a delegate system during annual general meetings (AGMs).
According to Obonyo, large-scale AGMs involving tens of thousands of members make meaningful discussions and decision-making difficult.
“We want quality meetings where members’ views can be adequately represented,” he said, explaining, “The delegate system does not undermine democracy because members will still deliberate at lower levels before delegates carry resolutions to national meetings.”
On the pending Co-operative Bill currently before Parliament, Obonyo said mediation efforts between the National Assembly and the Senate were ongoing to resolve a few remaining differences, including term limits for officials.
He expressed optimism that the mediation process would be completed before the July celebrations.
Meanwhile, Cooperative Alliance of Kenya (CAK) Chief Executive Officer Daniel Marube said the cooperative movement remains a major pillar of Kenya’s economy, with an estimated 20 million Kenyans belonging to at least one cooperative society or SACCO.
“About 75 per cent of the population depends directly or indirectly on cooperative activities,” Marube said. “Cooperatives have provided affordable financial services, supported small businesses, financed housing, and improved livelihoods for millions of Kenyans,” he emphasized.
Marube said cooperatives have enabled small-scale farmers to aggregate and market their produce more effectively, increasing their incomes and improving food security.
He also emphasized the importance of attracting young people to the cooperative movement through worker cooperatives and technology-driven innovations.
“We want young people to see cooperatives as vehicles for economic empowerment and employment creation,” he said.
While supporting the proposed delegate system, Marube urged the government to allow more time for member education and public participation, especially in rural and agricultural cooperatives.
“We support the idea because it promotes quality discussions and better governance,” he said, however, adding members need enough time to understand how the system works and why it is necessary.
Marube also called for gradual reforms in the sector, encouraging smaller SACCOs to consider merging to improve sustainability and competitiveness.
By Joseph Ng’ang’a
