Nairobi: 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.
According to Kenya News Agency, the government has proposed new governance structures to engineer deepening financial inclusion, largely targeting the majority of savers out of financial brackets. This will also guarantee sound regulation of the SACCO subsector. The proposed legislative framework, the Sacco Societies (Amendment) Bill 2025, involves the establishment of a Central Liquidity Facility (CLF) and a deposit guarantee fund in collaboration with cooperative sector actors.
The reform agenda includes plans to tighten regulation by enhancing the capacity of the Sacco Societies Regulatory Authority (SASRA) and mandating digital reporting. These changes aim to transition SACCOs towards a more integrated, resilient, and secure financial model capable of withstanding global market competitiveness.
Dr. Gamaliel Hassan, Chief Executive Officer of Stima SACCO, highlighted during a 3-day meeting for cooperative leaders on leadership, ethics, and strategic governance forum 2026, that the sector is a critical component of Kenya’s financial system. However, it faces challenges, including fragmented regulation and a lack of financial safety mechanisms. Kenya has over 13,000 registered SACCOs, but only 355 are regulated by SASRA. Despite their small number, these SACCOs account for 85 percent of the sector’s total assets, which approximately stand at Sh1 trillion, serving over 7.4 million members.
Dr. Hassan spoke on key reform proposals anchored on six pillars aimed at transforming Kenya’s SACCO sector into a more stable, transparent, and trusted pillar of the financial system. The proposals encourage consolidation within the sector, including mergers and a temporary moratorium on new SACCO registrations to address fragmentation. Regulated SACCOs may be rebranded as ‘credit unions’ to align with global standards and distinguish them from informal entities.
He explained that proposed amendments to the SACCO Societies Act 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, part of a report on the transformation of SACCO systems in Kenya by the Committee of Experts reviewing the SACCO legal framework, result from extensive stakeholder engagement intended to build a resilient SACCO ecosystem that protects members and supports economic growth.
Tom Akeno, Chairperson of the Board of Directors at Ufanisi Savings and Credit Society, called on stakeholders within the cooperative sector to engage in discussions surrounding National Assembly Bill No. 32, currently at the committee stage in Parliament. He emphasized the importance of this stage for SACCO leaders and members to provide input before the bill advances further. Certain provisions, such as the requirement for at least 30 SACCOs to form a secondary cooperative, may require further scrutiny and stakeholder input.
Antony Muthee Njiru, a consultant in the financial services and cooperative sector, discussed two key legislative developments: the revised Cooperatives Bill and the proposed Sacco Societies Bill (2025). The updated Cooperatives Bill seeks to address taxation challenges for primary SACCOs with corporate members by allowing them to admit non-natural members while benefiting from favorable tax treatment, aligning the sector with the 2010 Constitution.
Njiru urged stakeholders to participate in shaping the bill, noting that misinformation and aging leadership are key challenges in the sector. He believes that reform will enable SACCOs to better manage risk, improve returns, and remain competitive. Additionally, Njiru promotes financial literacy through his book ‘The Discipline of Wealth and Risk,’ focusing on disciplined saving, smart investing, and sustainable wealth building.
The 3-day Leadership, Ethics, and Strategic Governance Forum, organized by the Cooperative Alliance of Kenya, is themed ‘Leading Through Disruption: The Co-operative Sector Strategic Response at Board and Operational Levels,’ and was officially opened by Cooperative Cabinet Secretary Wykliffe Oparanya.
