The government is fast-tracking new reforms to help Savings and Credit Cooperative Organizations (SACCOs) endure changing dynamics in the global financial sector, more so, guaranteeing good governance and protecting member savings.
To engineer deepening financial inclusion largely targeting the majority of savers out of financial brackets, the government has proposed new governance structures that will also guarantee sound regulation of the Sacco subsector.
In a proposed legislative framework—the Sacco Societies (Amendment) Bill 2025, the National Government jointly with cooperative sector actors plans to establish the Central Liquidity Facility (CLF) and a deposit guarantee fund.
In the reform agenda, the State plans to tighten regulation by enhancing capacity regulation of Sacco Societies Regulatory Authority (SASRA) in addition to making digital reporting mandatory.
The new changes are aimed at transitioning SACCOs towards a more integrated, resilient, and secure financial model that can withstand the financial competitiveness in the global market.
Speaking during a 3-day meeting for cooperative leaders on leadership, ethics, and strategic governance forum 2026, Dr. Gamaliel Hassan, Chief Executive Officer of Stima SACCO, said the sector has grown into a critical component of Kenya’s financial system but continues to face challenges, including fragmented regulation and lack of financial safety mechanisms.
According to data from the Kenya National Bureau of Statistics, Kenya has over 13,000 registered SACCOs, but only 355 are regulated by the Sacco Societies Regulatory Authority (SASRA).
Despite their small number, these regulated SACCOs account for 85 percent of the sector’s total assets, which currently stand at approximately Sh1 trillion, serving over 7.4 million members.
He spoke on key reform proposals anchored on six pillars and aimed at transforming Kenya’s SACCO sector into a more stable, transparent, and trusted pillar of the country’s financial system.
“These proposals encourage consolidation within the sector, including mergers and a temporary moratorium on new SACCO registrations to address fragmentation, and regulated SACCOs may be rebranded as ‘credit unions’ to align with global standards and distinguish them from informal entities,” he said.
He continued to explain that proposed amendments to the SACCO Societies Act also include tiered licensing, stricter governance requirements, and enhanced financial discipline measures such as limits on insider lending and controlled dividend payouts.
Dr. Hassan emphasized that the reforms that are in the report on the transformation of the SACCO systems in Kenya by the Committee of Experts reviewing the SACCO legal framework are the result of extensive stakeholder engagement and are intended to build a resilient SACCO ecosystem that protects members and supports economic growth.
“A stronger and more trusted SACCO sector is a shared responsibility. These reforms are designed to secure the future of millions of Kenyans who rely on SACCOs for financial services,” he said.
The Chairperson of the Board of Directors at Ufanisi Savings and Credit Society, Tom Akeno, called on stakeholders within the cooperative sector to actively engage in discussions surrounding National Assembly Bill No. 32, currently before Parliament at the committee stage.
He emphasized that the current stage of the legislative process presents a critical opportunity for SACCO leaders and members to provide input before the bill progresses further.
“This is the right time for us to engage so that when we interact with legislators, our position is clear and well-coordinated,” he said.
While welcoming the proposed reforms, Akeno pointed out that certain provisions such as the requirement for at least 30 SACCOs to form a secondary cooperative may require further scrutiny and stakeholder input. “We must carefully review these proposals to ensure they align with the interests and realities of the SACCO sector,” he added.
Antony Muthee Njiru, a consultant in the financial services and cooperative sector who spoke on proposed reforms affecting SACCOs and cooperatives, noted two key legislative developments: the revised Cooperatives Bill and the proposed Sacco Societies Bill (2025).
“The updated Cooperatives Bill seeks to address taxation challenges, particularly for primary SACCOs with corporate members, by allowing them to admit non-natural members while benefiting from more favorable tax treatment, and this also aligns the sector with the 2010 Constitution.
He urged stakeholders to participate in shaping the bill, noting that misinformation and aging leadership remain key challenges in the sector and that through reform this should enable SACCOs to better manage risk, improve returns, and remain competitive.
Beyond policy, Njiru also promotes financial literacy through his book ‘The Discipline of Wealth and Risk, which focuses on disciplined saving, smart investing, and building sustainable wealth.
The 3-day Leadership, Ethics & Strategic Governance Forum, organized by the Cooperative Alliance of Kenya is under the theme “Leading Through Disruption: The Co-operative Sector Strategic Response at Board and Operational Levels,’ and was officially opened by Cooperative Cabinet Secretary Wykliffe Oparanya today
By Wangari Ndirangu
