Page 18 - FULL MAGAZINE - KUSCCO.indd

SACCO INDUSTRY WATCH

Further, on defaulting Co-operative The Union out rightly points out that AMENDMENTS TO LAWS GOVERNING THE
loans SACCOs will be encouraged to it is not convinced by SASRA’s claims SECTOR
join the Credit Reference Bureau to and holds the view that SASRA’s The proposed amendments on the Statute
share information on defaulters with argument on its need to replace Law (Miscellaneous Amendments) (No.2)
NSGDQ?M@MBHDQR@MCHLOQNUDSGDHQQHRJ Government funding with levy funding Bill, 2018 to both the Co-operatives Act,
OQN?KHMFNEONSDMSH@KBKHDMSDKD
is unfounded and has no legal backing. Cap 490 and the SACCO Societies Act,
Cap 490B raises some serious concerns.
KUSCCO’s policy paper supports the “We acknowledge that the increase in The Bill proposes the amendment of the
draft Co-operative Development Policy regulated SACCOs will have led to an Co-operative Societies Act, Cap 490 by
of 2017, and recommends its adoption increase in costs for SASRA but believe introducing ‘Social Impact Member’s (SIM)
into a Sessional Paper. that the resultant increase in deposits, who shall be exempted from payments
and thus in the levy charges, should made by other members of the Co-operative
The Union argues that the adoption cover those costs. However, there are Society. Secondly, the Bill also proposes the
of the policy will provide a basis CH?DQDMSV@XRNEBG@QFHMFSGDKDUXSHS amendment of the SACCO Societies Act, Cap
for legislation review which will reads. 490B to introduce a Special Fund.
streamline the Co-operative
movement’s operations and views the The Union probes to be able to review “KUSCCO notes that there has been no
draft policy as well aligned with the SASRA’s accounts noting that its most Stakeholder involvement in the development
Constitution of Kenya, 2010. recent accounts, available on the of these Amendments and this violates both
SASRA website are for the year ending the requirements of Constitution of Kenya
“The more proactive engagement 30 June 2012 and since they have an and of the ILO Promotion of Co-operatives
between Government, the Co- error cannot be opened. Recommendation, 2002 (No. 193) to which
operative movement and other Kenya as member Country subscribes,” it
stakeholders proposed in the draft “SASRA should consider cost cutting reads.
policy will provide the much-needed avenues, adopt open book accounting
integrated approach in addressing and urgently publish its accounts for The Union also holds that these Proposals
challenges faced by the Co-operative all periods up to 30 June 2018, so that distort the Co-operative Governance
movement. The draft policy provides all societies and the Union can assess Structure and create a second centre of
directives addressing emerging SGDHQNVM?M@MBH@KRS@MCHMFSSGD power beyond reproach within the Co-
Co-operative enterprises and report states. operative Societies and the SACCOs.
opportunities,” the policy reads.

SASRA LEVY
The paper asserts that the proposal
by the Government to increase the
SACCO Societies Deposit Levy will
raise the cost of providing low cost
loans, deter borrowing and discourage
SACCOs from attaining sensible capital
adequacy ratios.

Currently, SASRA is funded through
@KDUXNMCDONRHSRRDS@S
NE
deposits held at the date of the last
audited accounts of the SACCO and
invoiced annually (thirty days before
1st January of each year), which
provides 60 per cent of SASRA’s
budget. The balance of 40 per cent is
?M@MBDCAXSGDDWBGDPTDQ

Dr. Chris Kiptoo, CBS, former acting Co-operatives PS,

16| SACCO Star Magazine