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Kenya: SASRA Rules Out Deadline Extension for Saccos to Comply With New Regulations

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4 years ago

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Nairobi — The SACCO Societies Regulatory Authority (SASRA) will not extend the June 30, 2021 deadline for Non-Withdrawable Deposit-Taking SACCOs or BOSA only to apply for authorization to operate in the country.

Citing the fact that the deadline is set out in the law, and the fact that SACCOs in the business has had over one year to prepare and comply with the regulations, SASRA has warned the public against dealing with any SACCO Society which will not have complied with the new Regulations by June 30, 2021.

“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,” SASRA says the Acting Chief Executive Officer Peter Njuguna.

In addition, the persons involved in such dealing may be liable to criminal prosecutions.

Also targeted for regulation are the SACCOs that mobilizes membership and subscription to its share capital through digital or other electronic payment platforms; and those that mobilize membership and subscription to its share capital from persons who are ordinarily resident outside the country.

In the recent past, many Kenyans have lost their hard-earned savings in pyramid-scheme-like entities operating virtually and purporting to be SACCOs, by hoodwinking 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.

Although it has been reported that there are very many Non-WDT-SACCOs in Kenya, the new regulations target only those with deposits worth Sh100 Million and above – and which have been deemed to present a systemic risk to the government.

Those whose deposits are below Sh100 Million, and are neither Virtual nor Diaspora based, are expected to be overseen by the respective County Government Co-operative Offices where they operate. This will ensure that there is no room for any SACCO to operate without adequate government oversight.

SASRA since its establishment in 2010 been supervising and regulating deposit-taking SACCOs which operates in a banking-like manner and offers similar banking services as those in the mainstream banking sector.