Gov’t hints at possible liquidation for persistently weak Saccos

Co-operative, Micro, Small and Medium Enterprises, Cabinet Secretary Wycliffe Oparanya, now says that dormant Saccos which are not in operation will be de-registered and liquidated.

Speaking during the release of the annual Sacco supervision report, Oparanya noted that Saccos have until the end of the month to comply by filing their returns with the Commissioner of Co-operatives, even hinting at possible consolidation of Saccos following their review.

The latest Sacco supervisor’s report, which takes account of the year ending December 2024, now shows that 7.3 million Kenyans are members of a Sacco society, an increase from 6.8 million recorded in 2023.

Of this, however, 5.7 million members are active, while another 1.6 million remain dormant.

The report further shows that 6.8 million members are in deposit-taking Saccos, while 514,000 members are in non-deposit-taking Saccos.

The report, which was compiled for the year ending in December 2023, however, shows a slight decline in the number of Saccos to 356, but the number could be reduced should the government follow through with its plan to consolidate and liquidate some.

“Those which are only registered by name and are not active will be deregistered and liquidated by the Commissioner for Co-operatives as required by the law. Those which are active and viable will be required to be supervised by SASRA. Otherwise, they shall equally be de-registered and liquidated,” said Oparanya.

To further tighten the grip on Sacco management, the CS has hinted at the possibility of changes in policy to determine who sits on the boards of Saccos.

Sacco auditors have also been put on notice for “cooking books,” with Oparanya saying that this has resulted in loss of funds for some Saccos in the recent past. He fingered those tasked with the preparation of financial reports, as well as auditors — both internal and external — who look the other way.

The CS directed the Commissioner of Co-operatives, the regulator, to rein in both internal and external auditors who fail to secure correct and accurate financial reporting by regulated Saccos.

“Ensure that internal auditors of Sacco render their opinion on the financial statement prior to those statements being subjected to external auditors. Institute appropriate action against external auditors who internally failed to render external auditing services in accordance with the Sacco Societies Act, including referral of such external auditors to ICPAK for additional sanctions,” he noted.

Saccos have been lauded for crossing the one trillion mark, with their combined asset base standing at Ksh.1.07 trillion in 2024, according to the annual supervision report.