The Sacco Societies Regulatory Authority (Sasra) has ruled out the possibility of extending the June 30 deadline for Savings and Credit Co-Operative Societies (Saccos) to comply with new regulations.
The rules contained in the Sacco Regulations Act 2020 bars saccos from offering specified non-deposit-taking business unless they are given a green light by the regulator.
“No Sacco society in Kenya shall be allowed to undertake or continue undertaking the specified non-deposit taking business unless the society shall have fully complied with the Act and Regulations 2020,” said Peter Njuguna, Sasra Ag. CEO.
The regulations were drafted following an increased number of saccos or pyramid-scheme-like entities that went under with member funds, with officials either disappearing or playing cat and mouse games with members.
“They hoodwink unsuspecting members of the public to make savings virtually with them, with the promises of good returns. But immediately after mobilizing money from the public, such entities almost always disappear in the thin air, leaving the depositors with no recourse. The new regulations will thus reign in on such dubious entities,” said Njuguna.
The regulations which took effect in January target virtual saccos with deposits amounting to Ksh100 million and above.
Those whose deposits are below Ksh100 million, and are neither virtual nor diaspora based, are expected to be overseen by the respective County Government Co-operative Offices where they operate.
Njuguna however warned members who would deposit their funds in unregulated entities that they did so at their own risk.
“Any person, including members of the public and public entities who undertake such specified non-deposit-taking business transactions or other businesses with an unauthorized person, entity, or Sacco Society, shall be doing so at his/her risk and peril. In addition, the persons involved in such dealing may be liable to criminal prosecutions,”