By Njeri Irungu
Nairobi, Kenya
In a significant development for Kenya’s cooperative movement, the government has launched ambitious reforms aimed at revitalizing the crucial SACCO sector. The Ministry of Co-operatives and MSMEs Development has taken twin actions that promise to reshape the regulatory landscape and governance structures of savings and credit cooperatives across the nation.
A distinguished committee of local and international experts has been convened to undertake a comprehensive review of the SACCO Societies Act of 2008. Chaired by Marlene Shiels, an accomplished credit union leader from Scotland, this panel brings together legal minds, financial experts and cooperative specialists. Their task is to modernize the legislative framework governing SACCOs, ensuring it meets contemporary challenges while preserving the unique character of Kenya’s cooperative movement.
The review process will examine several critical areas including the establishment of financial safety mechanisms, improvement of operational efficiencies, and alignment with international best practices. Of particular importance are proposals for a centralized liquidity facility and deposit protection scheme – measures designed to safeguard members’ savings and enhance institutional stability. The committee has been given three months to complete its work and present recommendations that will inform forthcoming legislative amendments.
Simultaneously, a new leadership team has taken the helm at the Kenya Union of Savings and Credit Cooperatives following the conclusion of the interim board’s term. Under the chairmanship of David Mategwa, this transition board faces the challenging task of steering KUSCCO through its restructuring process while protecting members’ interests. Their mandate includes strengthening corporate governance, overseeing asset recovery efforts, and preparing the organization for its envisioned role as a national cooperative federation.
Cabinet Secretary Wycliffe Oparanya emphasized that these initiatives form part of the government’s broader commitment to building a more robust and transparent cooperative sector. “Our SACCOs are vital community institutions that empower millions of Kenyans,” he noted. “These reforms will ensure they continue to serve members effectively while meeting the highest standards of accountability.”
The Ministry’s actions come at a pivotal moment for Kenya’s cooperative movement, as policymakers seek to balance modernization with the preservation of the sector’s unique member-focused ethos. With new leadership in place and comprehensive legislative review underway, the stage is set for transformative changes that could redefine the future of cooperative finance in Kenya.
These developments reflect growing recognition of SACCOs’ central role in Kenya’s financial inclusion agenda and their contribution to grassroots economic development. As the reform process unfolds, stakeholders across the cooperative movement will be watching closely, hopeful that these measures will usher in a new era of stability and growth for this vital sector.
