For Saccos with less than Sh1 billion in assets, new options on how Mergers and consolidation can be more accessible and manageable will be the focus of Sacco Societies Regulatory Authority (Sasra) next steps, according to the recently released details.
Saccos with large asset bases could be allowed to merge with much smaller entities to yield the benefits of such amalgamations including – better resource utilization, greater operational safety and assurance of better value for their investments’ etc.
This is capitalizing our small saccos as they will be able to not only be equal partners with the big ones but also to the regulator, it will be easier to oversee.” said CS Oparanya.
The Sacco sector has not only maintained the positive growth trend but also crossed the 1 trillion a milestone to reach 1.8 trillion was recorded in Sacco assets. It is over 9.17 percent growth compared to 2023, which is mainly due to the rise in the loan book from 758.57 billion in 2023 to 845.11 billion in 2024.
Supporting this setup, Sasra is also considering more legislation around the matter social and active saccos getting deactivated and consolidation as the first option to increase the asset base.
Those with less than 100 million in assets, as well as housing cooperatives, will also come under the Sasra umbrella, according to the official statement by Oparanya.
Besides, under the new regulations, Saccos should obtain Sasra’s authorization before availing any commercial banking products. The explained rationale for this is the board issuing the high dividend levels that strain the working capital leading to the low liquidity levels thus exposing the societies to financial crisis.
The government will also be calling for reform in the transport sector as part of its master plan to bring better operations and more transparency with Matatu Saccos being divided into two categories with the REA slated to manage their transition.
The raft of regulatory measures is expected to boost confidence in the Sacco sector, which remains a key driver of financial inclusion and savings mobilization in Kenya.