THE GOVERNMENT ISSUES NEW DIRECTIVES TO SACCOS ON MANAGEMENT AND LOANS

The Ministry of Co-operatives and MSMEs Development, led by Cabinet Secretary Wycliffe Oparanya, unveiled new rules on September 25 to strengthen SACCO operations in management and lending.
Speaking during the official launch of The Sacco Supervision Report 2024, Oparanya said the measures aim to enhance accountability and protect members’ savings. The Ministry directed SACCOs with over 5,000 members to adopt the delegate system, ensuring that general meetings serve as forums for effective decision-making.
Additionally, SACCOs shall not be allowed to borrow from external sources to pay dividends. As a result, any SACCO intending to procure an external loan must obtain written approval from the Commissioner, subject to compliance with the prescribed ratios.
“No SACCO shall be allowed to borrow from external sources to pay dividends, and henceforth any SACCO intending to procure an external loan must obtain written approval from the Commissioner, subject to compliance with the prescribed ratios,” Oparanya said.
The ministry also directed SASRA and the Commissioner of Co-operatives to tighten oversight of audited SACCO accounts.
He ordered that all financial reports and statements be countersigned by the Chief Executive Officers and Finance Officers who prepare them, alongside the Board of Directors, to ensure shared accountability.