The Kenyan government has halted the registration of new SACCOs for three months to strengthen regulation and eliminate fraudulent groups.
This decision was announced by Cooperatives Cabinet Secretary Wycliffe Oparanya on Wednesday. The suspension is meant to give a newly formed expert committee time to review existing laws and suggest changes that will improve policy compliance and governance within the SACCO sector.
Speaking during the inauguration of the Transition Board of Directors of the Kenya Union of Savings and Credit Co-operatives (KUSCCO), Oparanya explained that this pause is necessary. He said the move aims to stop the growing number of fake or “briefcase SACCOs” — groups that exist only on paper, operate without regulation, and often engage in fraudulent activities.
“These briefcase SACCOs undermine trust in the cooperative movement and pose real risks to financial stability,” said Oparanya. He stressed that only legitimate SACCOs should be allowed to operate, and the government must take action to protect Kenyans who rely on these financial institutions.
To support this initiative, the Ministry has set up a five-member expert committee. This team will review the SACCO Societies Act of 2008 and suggest updates that reflect international best practices and address current challenges in the sector.
At the same event, Oparanya also oversaw the appointment of a new Transition Board of Directors for KUSCCO. The board, chosen by the Commissioner for Cooperatives, will serve a two-year term and play a key role in guiding reforms within the organization and the wider cooperative movement.
Oparanya expressed confidence that both the new KUSCCO board and the expert committee will help build stronger, more transparent SACCOs that can better serve Kenyans. He described the suspension and related reforms as part of a broader plan to restore order and integrity in a sector that plays a crucial role in promoting savings, credit access, and grassroots economic growth.
The government's recent actions signal a renewed push to professionalize SACCO operations across the country and ensure that they continue to support financial inclusion in a secure and trustworthy manner.
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