A new Bill before the National Assembly could significantly change how Savings and Credit Co-operative Societies operate in Kenya, especially in the management of liquidity, payments, and protection of members’ deposits.
The proposed law, officially titled The Sacco Societies Amendment Bill, 2025, was published in the Kenya Gazette Supplement dated June 30, 2025. It seeks to amend the Sacco Societies Act by introducing a new framework for what it calls central liquidity and shared services business.
In simple terms, the Bill wants to allow eligible Saccos to pool certain financial services through a regulated secondary co-operative society, while giving the Sacco Societies Regulatory Authority, commonly known as SASRA, more powers to license, supervise and punish non-compliance.
What the Bill proposes
Under the Bill, at least 30 Sacco societies licensed or authorised under the Act may form a secondary co-operative society to run central liquidity and shared services.
This secondary co-operative would be allowed to receive money from member Saccos, hold liquidity reserve accounts, invest in government securities, provide short-term lending to member Saccos, settle payment transactions, and run shared payment platforms.
It may also offer agency or intermediary services for domestic and international transfers on behalf of member Saccos, facilitate trade finance, issue payment instruments, and provide daily liquidity and performance reports to the regulator.
Why this matters to Sacco members
For ordinary Sacco members, the Bill is important because it touches on the safety, movement and protection of Sacco money.
The proposal appears aimed at strengthening how Saccos manage liquidity, especially when they need quick access to funds or when members make withdrawals. By creating a regulated central liquidity system, the Bill could help reduce financial pressure on individual Saccos.
It also seeks to modernise Sacco payments by allowing shared platforms that can support faster and more efficient settlement of transactions between member Saccos.
What Saccos will not be allowed to do
The proposed law also sets clear limits on the secondary co-operative society.
Such an entity will not be allowed to conduct deposit-taking business with ordinary individuals, lend directly to natural persons, or engage in wholesale or retail trade.
This means the proposed central liquidity body would mainly serve member Sacco societies, not individual customers.
SASRA to get more powers
The Bill gives SASRA power to license, regulate and supervise central liquidity and shared services businesses.
It also gives the regulator authority to prescribe minimum capital and liquidity requirements, approve board members and senior officers, conduct on-site and off-site supervision, and approve audited accounts of secondary co-operative societies involved in the business.
In addition, SASRA would be able to make regulations on fees, charges, levies, code of conduct rules, liquidity requirements and penalties.
Tough penalties for breaking the law
The Bill proposes penalties for anyone who contravenes provisions relating to central liquidity and shared services.
A person found guilty could face a fine of up to KSh 3 million, imprisonment for a term not exceeding five years, or both.
This signals that the government wants tighter compliance in the Sacco sector, which has grown to become a major pillar of financial inclusion in Kenya.
Changes to Deposit Guarantee Fund
The Bill also proposes changes touching on the Deposit Guarantee Fund, which protects members’ deposits when a Sacco collapses or has its licence revoked.
Under the amendments, a member of a Sacco society whose licence or authorisation has been revoked may lodge a claim with the Deposit Guarantee Fund.
However, the Bill also provides that payments out of the fund cannot begin unless the Cabinet Secretary, in consultation with the Cabinet Secretary responsible for finance, appoints and gazettes the commencement date.
The Board of Trustees may also refuse payment to a person who, in its opinion, had responsibility for or benefited directly or indirectly from circumstances that led to the revocation of the Sacco’s licence.
Who is behind the Bill?
The Bill is dated June 10, 2025, and is signed by Kimani Ichung’wah, the Leader of Majority Party.
According to the memorandum in the Bill, the proposed amendments are intended to align the management and operations of the Deposit Guarantee Fund with best international practices.
Does the Bill affect counties?
Yes. The Bill states that it concerns county governments because co-operative societies are listed as a county government function under the Fourth Schedule of the Constitution.
It also states that its enactment may occasion additional expenditure of public funds, meaning it could have budgetary implications.
