The Cooperative Alliance of Kenya (CAK) has dismissed as false and misleading claims that the government intends to access members’ savings held in Savings and Credit Cooperative Societies (SACCOs) to finance long-term infrastructure projects.
Speaking during a press briefing on Friday, CAK Chief Executive Officer Daniel Marube assured cooperative members that no provision in the proposed Cooperative Societies Bill or the SACCO Societies (Amendment) Bill allows the government to seize or compel SACCOs to invest members’ funds in infrastructure bonds.
“The claims circulating on social media and some mainstream media platforms have no basis in law,” Marube said. “They have caused unnecessary anxiety among our members, yet there is absolutely nothing in the legislation that permits the government to take members’ savings for infrastructure financing.”
Marube explained that the Cooperative Societies Bill currently before Parliament is the product of nearly 14 years of consultations involving cooperative stakeholders and is now at the mediation stage before becoming law.
He added that the SACCO Societies (Amendment) Bill has also undergone significant revisions following submissions by cooperative leaders and members and will still be subject to further public participation when it reaches the Senate.
According to CAK, one of the key reforms proposed in the amendment bill is the creation of unions of SACCOs, allowing institutions with common interests to collaborate for greater efficiency.
Marube said the proposed unions would enable SACCOs to share services such as legal support, auditing and technology, reduce operating costs through economies of scale, and facilitate inter-lending among member SACCOs to improve liquidity.
“The so-called ‘super SACCO’ is simply a union of SACCOs working together. It is not an institution designed to pool members’ savings for government projects,” he said.
Another major proposal is the establishment of a SACCO Deposit Guarantee Fund to protect members’ deposits if a SACCO collapses. Marube likened the proposal to the Kenya Deposit Insurance Fund that safeguards deposits in commercial banks.
He said the guarantee fund would serve as an insurance mechanism to ensure members are compensated in the event of institutional failure.
Responding to concerns about whether SACCOs could eventually invest in long-term government securities, Marube said any such decision would rest entirely with members through Annual General Meetings (AGMs).
“No government authority can compel a SACCO to invest in infrastructure bonds. Investment decisions are made democratically by members during AGMs,” he said.
He acknowledged that many SACCOs currently invest surplus liquidity in short-term government securities such as 91-day Treasury Bills but emphasized that these investments are made for liquidity management purposes rather than long-term financing.
Marube noted that SACCO funds are primarily intended to provide affordable credit to members, warning that locking funds into long-term investments would undermine that core objective.
Among the reforms are mandatory regulation of all deposit-taking SACCOs by the Sacco Societies Regulatory Authority (SASRA), vetting of directors before assuming office, accreditation of auditors, and stricter penalties for fraud.
He said officials found guilty of embezzling members’ funds would be barred from working in any cooperative institution, prosecuted, and have their assets recovered to compensate affected members.
“We want to make the consequences so severe that anyone contemplating stealing cooperative funds will think twice,” Marube said.
The CAK chief clarified widespread misconceptions regarding the cooperative sector’s reported asset base, currently estimated at more than Sh1.3 trillion.
He explained that the figure represents loans already advanced to members and other assets, rather than idle cash available for investment.
“People imagine there is Sh1.3 trillion sitting in bank accounts. That is not the case. Those assets are in homes, businesses, motor vehicles, school fees, medical expenses and other investments financed through member loans,” he said.
Marube urged cooperative members to disregard misinformation and refrain from sharing unverified reports that undermine confidence in the sector.
“If there were any attempt by the government to interfere with cooperative funds, the Cooperative Alliance of Kenya would be the first to mobilize members to oppose it,” he said. “As things stand, there is no such threat.”
By Joseph Ng’ang’a
