Co-operatives Cabinet Secretary Simon Chelugui, on Monday, ordered a crackdown on all Savings and Credit Cooperatives in a regulation exercise geared towards ensuring proper management of funds.
Speaking during a consultative meeting with farmers and stakeholders in Nairobi County, the CS attributed his directive to complaints lodged by members of various Saccos.
“Anybody who will be found to have engaged in fraudulent activities will face the full wrath of the law,” Chelugui warned, stating that the Sacco members were alarmed by the nature of operations at the said financial institutions.
“We will continue to uphold the highest standards of financial integrity and ensure the financial health of all institutions under its purview through transparent, accountable and well-run financial cooperatives,” he added.
Cooperative CS Simon Chelugui addressing the media on March 17, 2023.
The CS also ordered an inquiry into suspected violations of Sacco regulations by the Kenya Union of Savings and Credit Cooperative Society (KUSCCO), the umbrella body for Saccos.
Chelugui directed an audit to be done on KUSCCO to ascertain the credibility of the issues raised by the members.
According to Chelugui, the audit report would be used to determine whether KUSCCO was undertaking regulated Sacco business for the protection of the public interest or not.
“Addressed the press on the challenges KUSCCO was facing and the measures we have taken to steady the ship. I also assured the affiliate members to support the new management team as the government continues with legal and administrative actions,” Chelugui noted.
“KUSCCO is the umbrella body for Saccos and we’re fully cognizant of the big role the organisation plays in empowering Saccos through training among other things.”
The CS, nonetheless, lauded the public for exercising patience even as the ministry continued to restore confidence in the cooperatives’ financial sector.
“It behoves the SACCO sector to support the new changes that are taking place in the union as this is for the good of this institution,” Chelugui stated.
Section 49 of the Sacco Societies Act No. 14 of 2008 bestows authority to the CS to direct the Sacco Societies Regulatory Authority (SASRA) to conduct inspections of any SACCO society including its books of accounts, and even records.
On On Friday, January 26, the Sacco Societies Regulatory Authority (SASRA) revoked the licences of two financial institutions – Kenya Midland Sacco Society in Bomet County and Jacaranda Sacco Society Limited based in Kiambu.
According to SASRA, the two Saccos were suspended for one year, from January 1, 2024, to December 31, 2024 after they failed to undertake deposit-taking business in the past year.
Co-operative, Small, and Medium Enterprises Development Cabinet Secretary Simon Chelugui poses for a photo with KUSCCO Officials during an introduction of the new Board & Management.