The Trade, Industry and Cooperatives ministry wants the Commissioner of Cooperatives empowered to independently investigate, fine and prosecute errant Savings and Credit Cooperative Organisations (Saccos).
“The ministry is in the final stages of reviewing the law to come up with measures that can adequately respond to the rising cases of rogue saccos, including the possibility of terror outfits fashioning themselves as cooperatives.Cabinet Secretary Peter Munya said
The CS said the mandate of Commissioner of Cooperatives and that of Sacco Societies Regulatory Authority (SASRA) is limited, opening room for some saccos to collect and steal members’ contributions.
“We are carrying out reforms within the cooperatives sector to look at regulatory framework so as to give more teeth to the commissioner and even SASRA,” Mr Munya said last week.
“Right now, the most that a commissioner can do is to surtax, then use other government agencies to fine or prosecute. Looking at best practice, a regulator should be able to do instant fines and sanctions on the sector he is regulating.”
He stated that the mandate of the commissioner and that of SASRA sometimes overlap, making it difficult to know who should respond first and how.
The ministry is also concerned that with the Constitution, county governments were supposed to prepare and implement laws to govern county saccos but this has not happened, exposing savers to potential losses.
“SASRA’s mandate is restricted to a few high profile deposit-taking saccos yet counties lack their own laws. We want to clarify this lacuna and offer smooth interface between county and national government oversight,” said Mr Munya.
According to SASRA report covering up to end of December 2017, 176 deposit taking saccos had Sh305.3 billion deposits.