The Government has announced comprehensive reforms to Kenya’s cooperative financial system, following governance failures that led to a loss of Sh13 billion at KUSCCO and Sh7 billion for Metropolitan Sacco members.
Speaking during the KUSCCO 10th Annual Leaders’ Summit at the Sarova Whitesands Hotel in Mombasa, Cabinet Secretary (CS) for Cooperatives and MSME Development, Wycliffe Oparanya, reaffirmed the government’s commitment to stabilizing the Sacco ecosystem after recent breaches of governance.
“We must ensure legislation protects members’ savings,” Oparanya stated, adding that amendments to the Sacco Act will anchor transparency, digital integration, and institutional accountability.
The CS emphasized that Kenya, ranked eighth globally and first in Africa in cooperative financial systems, must strengthen governance frameworks to maintain its leadership position.
The proposed reforms include strengthening the Sacco Societies Regulatory Authority (SASRA) as the principal supervisory body and establishing a Deposit Protection and Savings Stabilisation Fund to safeguard member deposits.
The government also plans to introduce shared digital platforms to reduce technology costs and enhance cyber resilience, alongside a Central Equity Facility to provide emergency liquidity support to troubled Saccos.
A key reform is the mandatory professional registration for Sacco executives to prevent individuals responsible for governance failures from moving between institutions.
“Those who create governance failures in one Sacco will not be allowed to shift to another. Integrity is non-negotiable,” Oparanya said.
KUSCCO National Chairman David Mategwa reported progress in recovering lost assets, noting that property auctions are underway to reimburse affected Saccos.
“Recoveries are ongoing, auctions have begun, and funds are being returned. Though challenges exist, we have cleared pending bills and resumed our advocacy mandate,” Mategwa said.
He urged Saccos to continue honoring subscriptions and participating in leadership training to strengthen the cooperative movement.
The KUSCCO Chair described the reforms as a turning point for Sacco regulation and governance, aimed at rebuilding trust and driving innovation-driven growth in the sector.
by Hassan Bahati
