Players in the co-operative movement are jittery over a threat they say is posed by a proposed law that would allow membership of savings and co-operative societies (saccos) to outsiders.
New amendments to the Sacco Societies Act welcomes membership of saccos to outsiders and grants them special treatment.However, Co-operative Alliance of Kenya (CAK) has warned that gains made by the sector could all go up in smoke if the amendments currently before Parliament are adopted.
The alliance says the shares, deposits and savings held by a member or legible person are the ones that act as security for loan or monies advanced to the new members.
“This is a big compromise on the capital of a sacco. This is because though the capital covers the social impact members, there is no corresponding compensation by way of earnings to the sacco,” said Daniel Marube, the CAK chief executive officer.
Data from Commissioner of Cooperatives and Sacco Societies Regulatory Authority (SASRA) shows that saccos whose accounts have been audited have an asset base of Sh800 billion, deposits of Sh600 billion and loans advanced to members of Sh595 billion.
The new bill published recently and already in Parliament seeks to amend the Sacco Societies’ Act 2008 and Co-operative Societies Act Cap 490 whereby the new members will enjoy exemption on payment to the society in respect of membership. The source of the amendments is not clear, and CAK said they were also in the dark.