SASRA rules out deadline extension for SACCOs to comply with new regulations - Capital Business
Connect with us

Hi, what are you looking for?

Kenya

SASRA rules out deadline extension for SACCOs to comply with new regulations

NAIROBI, Kenya, May 3 The SACCO Societies Regulatory Authority (SASRA) will not extend the June 30, 2021 deadline for Non-Withdrawable Deposit-Taking SACCOs or BOSA only to apply for authorization to operate in the country.

Citing the fact that the deadline is set out in the law, and the fact that SACCOs in the business has had over one year to prepare and comply with the regulations, SASRA has warned the public against dealing with any SACCO Society which will not have complied with the new Regulations by June 30, 2021.

“Any person, including members of the public and public entities who undertake such specified non-deposit-taking business transactions or other businesses with an unauthorized person, entity, or SACCO Society, shall be doing so at his/her risk and peril,” SASRA says the Acting  Chief Executive Officer  Peter Njuguna.

In addition, the persons involved in such dealing may be liable to criminal prosecutions.

Also targeted for regulation are the SACCOs that mobilizes membership and subscription to its share capital through digital or other electronic payment platforms; and those that mobilize membership and subscription to its share capital from persons who are ordinarily resident outside the country.

In the recent past, many Kenyans have lost their hard-earned savings in pyramid-scheme-like entities operating virtually and purporting to be SACCOs, by hoodwinking unsuspecting members of the public to make savings virtually with them, with the promises of good returns.

But immediately after mobilizing money from the public, such entities almost always disappear in the thin air, leaving the depositors with no recourse.

The new regulations will thus reign in on such dubious entities.

Although it has been reported that there are very many Non-WDT-SACCOs in Kenya, the new regulations target only those with deposits worth Sh100 Million and above – and which have been deemed to present a systemic risk to the government.

Advertisement. Scroll to continue reading.

Those whose deposits are below Sh100 Million, and are neither Virtual nor Diaspora based, are expected to be overseen by the respective County Government Co-operative Offices where they operate. This will ensure that there is no room for any SACCO to operate without adequate government oversight.

SASRA since its establishment in 2010 been supervising and regulating deposit-taking SACCOs which operates in a banking-like manner and offers similar banking services as those in the mainstream banking sector.

There are 175 DT-SACCOs in Kenya as of March 2021 according to an official publication by SASRA.

However, SACCOs that do not undertake banking-like business popularly known as BOSA only or the Non-WDT-SACCOs have never been prudentially regulated, until the new regulations were published in May 2020.

It is therefore expected that the new regulations will bring the designated Non-WDT-SACCOs at par with their DT-SACCOs counterparts in terms of supervision and regulation, under SASRA, immediately upon the expiry of the deadline date fixed for 30th June 2021.

According to a public notice put out by SASRA, the regulator indicated that there will no extension of the June 30, 2021 deadline, after the six-month window expires.

It further warned that “no SACCO society in Kenya shall be allowed to undertake or continue undertaking the specified non-deposit taking business unless the society shall have fully complied with the Act and Regulations 2020.”

The targeted SACCOs are expected to comply by making the “appropriate applications to the authority for authorization, following the Regulations 2020 within six (6) months of the commencement of the Regulations 2020 on or before June 30, 2021.

SASRA has provided details on its website on how the targeted SACCOs can achieve compliance.

Advertisement. Scroll to continue reading.

 

Advertisement

More on Capital Business

Investments in Africa

NAIROBI, Kenya, Mar 28 – BURN Manufacturing (BURN), a carbon project developer, has announced the completion of a follow-on carbon project investment from Key...

World

LONDON, March 28 (Xinhua) — The gross domestic product (GDP) of the United Kingdom (UK) fell by an unrevised 0.3 percent in the last...

Top Story

NAIROBI, Kenya, Mar 28 – A total of 28 insurance companies dominate the list of abuse of buyer power cases in Kenya, the latest...

Aviation

NAIROBI, Kenya, Mar 28 – Skyward Express on Thursday unveiled its first direct flights from Jomo Kenyatta International Airport (JKIA) to Moi International Airport,...

Kenya

NAIROBI, Kenya, Mar 28 – Asset finance solutions provider Watu Credit has welcomed the publication of the draft national e-Mobility Policy. The company has...

Kenya

NAIROBI, Kenya, Mar 28 – The climate crusader Pan Africa Climate Justice Alliance (PACJA) has faulted the United Nations’ Santiago Network on Loss and...

Opinion

NAIROBI, Kenya, Mar 28 – Most Kenyans have become travel savvy post COVID-19 resulting in a lot of research and early bookings for both...

Kenya

NAIROBI, Kenya, Mar 28 – The Ministry of Investments, Trade, and Industrialization (MITI has moved quickly to address the recent tax concerns raised by...