The Cabinet Secretary for Co-operatives and MSME Development, Wycliffe Oparanya, has raised concerns over alleged mismanagement within sections of the SACCO sector, warning that stronger controls and accountability measures may be necessary to protect members’ savings.
Speaking on the state of cooperative societies, the CS noted that several SACCOs are struggling due to weak governance structures, poor financial controls, and imprudent use of resources.
He emphasized the need to regulate official travel and ensure that expenditures by SACCO leadership are justified, transparent, and directly beneficial to members.“There must be discipline in how members’ money is managed. Travel and other expenditures must be accountable and necessary,” the CS stated.
Oparanya further questioned the practice of benchmarking trips to foreign developing countries, arguing that capacity-building and knowledge exchange can be conducted locally within Kenya’s own successful cooperative institutions.In a strong regulatory signal, the CS indicated that SACCOs with investments in entities not regulated by the Central Bank of Kenya could be required to withdraw such funds within 30 days and transfer them to properly regulated financial institutions. The proposed directive aims to safeguard members’ savings and minimize exposure to unregulated financial risks.
The SACCO sector plays a critical role in Kenya’s economy, mobilizing savings and providing affordable credit to millions. The Ministry has reiterated that reforms are intended to strengthen the cooperative movement, restore public confidence, and ensure long-term sustainability.
Stakeholders are expected to engage in further consultations as regulatory proposals are refined and implemented.
