How saccos in Kenya are addressing non-remittance of funds

A majority of deposit-taking Saccos in Kenya are experiencing financial instability due to failure by state agencies and private companies to remit statutory deductions on time.

As the government streamlines savings and credit co-operative societies that are reeling under the weight of mismanagement, fraud and bad loans, failure by employers to remit deductions is increasingly becoming a big threat to the survival of many saccos.

To tackle this, the Sacco Society Regulatory Authority (Sasra) is developing legal and institutional proposals to protect saccos from such employers.


Sasra statistics show that by end of last year, employers in the public and private sector owed deposit taking saccos $26.7 million in unremitted deductions.

The deductions were in the form of either loan recovery or non-withdrawable deposit accounts, popularly known as back office service activities.

Of the unremitted deduction, 79 per cent were meant for loan repayment and 21 per cent for non-withdrawable deposits contributions.

“The perennial failure by various employer-institutions to remit deductions made from employees’ emoluments has had serious adverse effects on the financial soundness of various saccos,” said John Mwaka, Sasra chief executive through a circular seen by The EastAfrican.

Among the challenges saccos are facing include failure to meet and maintain prudential standards especially the liquidity ratio and capital adequacy ratio, liquidity constraints making it impossible to issue new loans and plunging them deeper into loss making.

The problem is compounded by the new stringent IFRS9 financial reporting standards that have hit all deposit-taking saccos further squeezing earnings.

Under IFRS9, capital adequacy, asset quality, earnings and liquidity remains key criteria for monitoring, evaluating and measuring the financial soundness and stability saccos.



ISO 9001


We commit to consistently promote SACCOs through advocacy and provision of quality technical and financial products that exceed the members’ expectations.
We shall comply with the statutory requirements and actively pursue continuous improvement of the ISO 9001:2015 Quality Management System (QMS) processes, capabilities and effectiveness.
In pursuit of our commitment we shall ensure that the quality policy and objectives that have been established and communicated to the Union employees shall be reviewed annually in accordance with the stipulated framework and quality standards.”