Oparanya Lifts Freeze on New SACCO Registrations, Introduces Tougher Rules to Strengthen Sector
Co-operatives and MSMEs Development Cabinet Secretary Wycliffe Oparanya has officially lifted the suspension on the registration of new Savings and Credit Cooperative Organisations (SACCOs), paving the way for the establishment of new cooperative societies under a stricter regulatory framework designed to enhance accountability, governance, and financial sustainability.
The announcement, made on Wednesday, June 3, marks a significant policy shift for Kenya’s cooperative sector, which has been operating under a freeze on new SACCO registrations since May last year following concerns over governance failures, financial mismanagement, and operational weaknesses in several institutions.
According to Oparanya, the decision to reopen registrations comes after an extensive review of the laws and regulations governing cooperative societies, undertaken by a committee of experts appointed by the ministry.
“I am pleased to announce that the Ministry of Co-operatives, through the Commissioner for Co-operatives, has lifted the suspension on the registration of new SACCOs with immediate effect,” Oparanya said.
“This decision follows the successful review of the legislative and regulatory framework governing the co-operative sector by a Committee of Experts appointed by the Ministry,” he added.
The move is expected to reignite growth within one of Kenya’s most influential financial sectors. SACCOs play a critical role in mobilising savings, providing affordable credit, and expanding financial inclusion, particularly among salaried workers, farmers, traders, and small business owners.
Under the new framework, prospective SACCOs will now be required to meet a series of stringent conditions before obtaining registration approval.
Among the new requirements is the establishment of a fully operational and accessible physical office staffed by at least one employee. The ministry says the requirement is intended to ensure that newly registered SACCOs have a verifiable presence and adequate capacity to serve members from the outset.
Additionally, applicants must demonstrate a minimum institutional capital base of KSh1.2 million to support initial operations. The amount excludes member deposits and is intended to provide a financial cushion during the startup phase.
Furthermore, applicants must demonstrate the ability to mobilise at least KSh10 million in member deposits during their first year of operation.
The government believes the measures will help reduce the risk of weak institutions entering the market and protect members’ savings from potential losses arising from poor management.
“As we continue strengthening the co-operative movement, the registration of new SACCOs will now be subject to enhanced requirements aimed at promoting sustainability, accountability, and good governance,”Oparanya stated.
The Cabinet Secretary emphasized that all applicants must fully comply with Sections 4, 5, and 6 of the Co-operative Societies Act, as well as all other relevant regulations governing cooperative societies in Kenya.
Industry stakeholders have largely welcomed the lifting of the suspension, noting that the cooperative movement remains a key pillar of Kenya’s economy. Kenya’s SACCO sector is among the largest in Africa, controlling billions of shillings in assets and serving millions of members nationwide.
Analysts say the stricter regulations could help restore public confidence in the sector following a series of governance challenges that exposed weaknesses in oversight mechanisms.
With registrations now reopened, the government hopes the new rules will foster the emergence of stronger, more resilient SACCOs capable of supporting economic growth, expanding access to credit, and protecting members’ investments.
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Oparanya Lifts Freeze on New SACCO Registrations, Introduces Tougher Rules to Strengthen Sector
