NAIROBI, Kenya, Feb 7 – The Sacco Societies Regulatory Authority (SASRA) is calling for more regulation of Savings And Credit Co-operative’s to enable them to upscale their operations to the same level as corporate financial institutions.
Chief Executive Officer Carilus Ademba said SASRA already deals with 215 deposit taking Sacco’s and with more strict regulation of the sector, it will be able to compete and enhance economic development.
“We want to be at the same level where you can be served by a bank or a Sacco and you are assured that you being served at the same standards across the board. With all the economic developments the country is going through, we feel that the Sacco’s should be up scaled to a higher level and this can only be done through regulation. It will be easier to deal and do business in the Sacco sector. The government can even channel their funds thorough the Sacco sector if executed well,” he said.
Speaking while signing a Memorandum Of Understating (MOU) with Strathmore University, Ademba added that students will now have more information which will help focus on challenges facing the cooperative sector as well as access and utilisation of Sacco’s.
“We realised there is no data and information on cooperatives in Kenya that can be relied on. Students are now taking courses in cooperative management yet there is now data, there’s info to assist them. The findings of this research will distributed to various universities to help in their studies,” Ademba said.
There are over 3,500 active Saccos in Kenya. The deposit taking Saccos, which are regulated by SASRA offer near banking activities; what is referred to as Front Office Services Activities (FOSA).
The key mandate of SASRA is to regulate the 215 institutions which control over 81 percent of the sector portfolio which stands at Sh202 billion.
Kenya’s Sacco subsector has rapidly grown to be the largest in Africa, accounting for 60 percent, 64 percent, and 63 percent of the continents savings, loan, and assets respectively.
SASRA joins the other four financial regulators namely the Central Bank of Kenya (CBK), Capital Markets Authority (CMA), Insurance Regulatory Authority (IRA) and Retirement Benefits Authority (RBA) in ensuring the entire financial sector is kept under watch for financial stability and for sustainable economic development.
Whereas these financial regulators have well established research functions with documented and relevant information in their areas, this may not be the case in the Sacco sub-sector.
The basic objective of the MoU is to allow various collaborative research activities for the mutual benefit of the two institutions for furtherance of their businesses. Basic research is a critical source of investment for developing the society’s learning capabilities and in turn develops a knowledge based economy.
Some of the areas that will also be covered in the agreement are; challenges facing the co-operative and the Saccos sub-sector as well as improvement of governance.