SACCOs grapple with tough new State laws and accounting rules

Early this year, mysterious legislation was tabled on the floor of the House by the Leader of Government Business Aden Duale. The Bill was to have huge ramifications on Savings and Credit Cooperative Societies (SACCOs) across the country. The Statute Law (Miscellaneous Amendments (No2) Bill) 2018 was meant to change the way the SACCOs function. It included proposals to amend the Co-operative Societies Act, Cap 490 and the SACCO Societies Act, Cap 490B, and introduce a new, privileged class of SACCO members called Social Impact Members who were supposed to be outsiders –without savings in any SACCO. They were to be allowed to vote only on matters that affect them. They were also not required to attend all meetings like other ordinary members. When Mr Duale introduced the Bill for the first reading in Parliament, there was uproar across the cooperative movement.

SACCO lobbies – the Co-operative Alliance of Kenya and the Kenya Union of Savings and Credit Co-operatives (KUSCCO) – were up in arms against the Government, saying they were not consulted and did not participate in its creation. KUSCCO Managing Director George Ototo told Financial Standard that the proposals in the Bill pose threats to the survival of SACCOs. “The Bill is clearly an affront to the SACCO movement. It is meant to have SACCOs taken over by outsiders. It will distort cooperative governance and create a second centre of power beyond reproach within the sector,” he said.

Acting Principal Secretary for Cooperatives Chris Kiptoo in another interview said he had no idea how the Bill got to Parliament. “As far as I am concerned, it is a mystery to me. I do not know how the Bill got to Parliament since even Treasury is not aware of its provisions,” he said, adding that he is also unaware who presented it to the Cabinet. But even as Dr Kiptoo struggles to come to terms with the mystery, his docket is preparing three new laws that, if passed into law, could again spell doom for SACCOs. They are the SACCO Societies (Amendment) Bill, 2018, the Financial Markets Conduct Bill and the SACCO Deposit Levy (Amendment) Order 2018.

https://www.standardmedia.co.ke/business/article/2001295277/saccos-grapple-with-tough-new-state-laws?fbclid=IwAR0LUsHmbppghro3XHsVZRnvrxpWYyRr0JHbF9mWNgba1DVCBt0tiZq1IZM