Government tightens rules on SACCO operations amid governance concerns
By Ascah Mwango, August 6, 2025The government has introduced strict measures to tighten oversight of Savings and Credit Cooperative Organisations (Saccos) in the country, in a move aimed at protecting members’ savings and strengthening accountability in the sector.
Co-operatives and Micro, Small and Medium Enterprises (MSMEs) Development Cabinet Secretary Wycliffe Oparanya told the Senate on Wednesday, August 6, 2025, that the Ministry has introduced a new Co-operative Bill to address governance issues affecting many Saccos.
“We have introduced a Co-operative Bill that is before you. This Co-operative Bill is supposed to address some of the governing issues that arose in the Moi University Sacco,” Oparanya said.
He added that the Ministry is also revisiting the Sacco Societies Act of 2008. A committee of experts has been appointed to review the law and seal existing loopholes, particularly by strengthening the Sacco Societies Regulatory Authority (SASRA), which has been struggling with limited capacity.
“SASRA lacks capacity. We want to make it a strong institution so that it can supervise all Saccos,” he said.
Apart from legislative changes, Oparanya said the Ministry has taken several administrative steps to enhance transparency. These include banning Saccos from investing in non-core businesses and introducing new approval processes for borrowing.
“We have issued a directive to all Saccos to ensure they do not invest in non-core businesses. We’ve also issued circulars to ensure that any borrowing must be approved by the Commission of Cooperatives,” he said.
Oparanya also noted that the Ministry now requires Saccos to have their financial returns audited every year. He said efforts are underway to improve day-to-day oversight of how Saccos are run.
“We have improved oversight by making sure that members work within delicate systems, so we have fewer people ruling the ATMs, so they can transact their businesses,” he explained.
Fixing MUSCO trouble
Turning to the troubled Moi University Sacco, which has been grappling with a financial and governance crisis, Oparanya said the Ministry had already taken steps to stabilise the situation and chart a way forward.
In a bid to stabilise the situation, Oparanya said he has replaced the liquidator who was overseeing the Sacco’s affairs. The new liquidator will now work alongside another appointed by the county government. This collaborative effort is aimed at streamlining the winding-up process, identifying the root causes of mismanagement, and ultimately reviving the Sacco.
He said the Ministry is also working to ensure all affected members are heard and involved in the recovery process.
“Specifically, what I have done for Moi University Sacco is, I have removed the liquidator who was there. I have appointed a new one who will work with another liquidator appointed by the county government,” he said.
He added that before the end of August, he will meet all stakeholders of the Sacco to develop a proper revival strategy.
The Sacco, once a dependable institution for university staff and affiliates, fell into disarray due to leadership failures and regulatory lapses in 2018, resulting in members being locked out of their savings.