Wycliffe Oparanya, Cabinet Secretary for Cooperatives, MSMEs and Development
The government has announced an initial investment of Ksh 200 million to operationalize the long-awaited Savings and Credit Cooperative Organization (Sacco) Deposit Protection Fund. The fund is aimed at safeguarding members’ deposits in case of Sacco collapses, a move that is expected to enhance confidence in the cooperative sector.
Speaking during the announcement, Cooperatives Cabinet Secretary Wycliffe Oparanya said the fund will be sustained through contributions from Saccos, ensuring a safety net for millions of depositors. The development comes at a time when over 30 Saccos face the risk of losing Ksh 13 billion following financial troubles at the Kenya Union of Savings and Credit Cooperatives (KUSCCO). A forensic audit of KUSCCO’s financial records revealed years of mismanagement and financial irregularities by senior officials.
With over 5 million depositors and assets worth more than Ksh 1 trillion, the Sacco sector has become a significant driver of Kenya’s socio-economic growth. To strengthen the sector, the cabinet has called for the fast-tracking of the Deposit Guarantee Fund, which will protect Sacco deposits, reduce government bailout risks, and enhance financial stability.
Oparanya further revealed that Saccos regulated by the Sacco Societies Regulatory Authority (SASRA) have expressed interest in investing in a soon-to-be-established Central Liquidity Fund. This fund will serve as a lending and investment vehicle for Saccos, enabling them to access capital more efficiently. Additionally, plans are underway to expand SASRA’s regulatory oversight to include Saccos with an asset base of less than Ksh 100 million.
The new measures mark a significant step toward strengthening Kenya’s cooperative financial sector and safeguarding the interests of Sacco members nationwide