What you need to know:
- The Sacco Societies Regulatory Authority will conduct the investigation to determine if Kuscco is undertaking unregulated sacco business in breach of the law.
- Cabinet Secretary Simon Chelugui said regulated Sacco business as prescribed by law entails either deposit-taking sacco business or specified non-deposit-taking business.
The saccos umbrella organisation, the Kenya Union of Savings and Credit Cooperative Society (Kuscco) is under investigation for allegedly engaging in illegal deposit-taking business.
The Sacco Societies Regulatory Authority (Sasra) will conduct the investigation to determine if Kuscco is undertaking unregulated sacco business in breach of the law and recommend sanctions on its officials and directors.
“I note with concern that from available information and from your extensive correspondence with management, the Kenya Union of Savings and Credit Cooperative Society Limited (Kuscco Ltd) appears to be carrying out/and/or undertaking regulated Sacco businesses without being licensed and/or authorised to do so as required by the provisions of Sacco Societies Act No.14 of 2008 and the Regulations made thereunder,” Co-operatives and Micro, Small Medium Enterprises Cabinet Secretary Simon Chelugui said in a directive to Sasra.
Regulated Sacco business
He said regulated Sacco business as prescribed by law entails either deposit-taking sacco business, which must be licensed, or specified non-deposit-taking business, which must be authorised.
“Section 49 of the Sacco Societies Act No.14 of 2008 empowers the Cabinet Secretary to direct the Authority to conduct an inspection or cause to be conducted an inspection of “any Sacco society and of its books, accounts and records,” Mr Chelugui said in a letter to Sasra CEO Peter Njugunga.
The CS said that inspection should determine whether or not the said Kuscco is undertaking regulated Sacco business in violation of the law.
“If so, determine the extent of the violation and recommend appropriate actions that may include sanctions on Kuscco Ltd and its directors and steps to bring it under the regulation of the Sacco Societies Act No.14 of 2008 for purposes of compliance as well as for the protection of the public interest,” Mr Chelugui said.
A review of the Kuscco by-laws revealed provisions involvement in deposit-taking although it is fashioned as an outfit that lobbies for the growth and development of saccos in the country.
“Fix rates of interest to be charged on loans and balances made to member societies…. Determine the rate of interest that shall be paid on deposits ….” the Kuscco by-laws partly stated in reference to the duties of its board of directors.
Disclosures by Sasra show that overall, total savings for the Sasra-regulated Saccos grew by 9.84 per cent to Sh620.45 billion at the end of last year compared to Sh564.89 billion in the preceding year.