The Sacco Society (Amendment) Bill, 2025, proposes a significant re-orientation of how secondary Saccos and those providing central liquidity and shared services are regulated in Kenya. If enacted, the Bill will tighten supervision, impose new governance and operational obligations, and increase penalties for non-compliance — measures intended to protect member savings, improve sector stability and clarify institutional accountability.

What the Bill seeks to change — a summary

The Amendment targets four inter-related areas:

  • Clear regulatory mandate for SASRA. The Bill explicitly grants the Sacco Societies Regulatory Authority (SASRA) the authority to license, regulate and supervise all entities engaged in central liquidity management and shared services. That mandate expands SASRA’s oversight to cover the full value chain of liquidity and pooling services provided to Saccos.
  • New operational and governance requirements for participating Saccos. Saccos that provide or participate in central liquidity and shared services will be required to:
  • Open and maintain a dedicated liquidity reserve account; and
  • Operate under a mandatory code of conduct and robust governance frameworks that SASRA will prescribe.
  • Stronger sanctions for breaches. The Bill proposes substantive penalties for entities that fail to meet the new obligations: a financial penalty of KSh 3,000,000, imprisonment of up to five years, or both.
  • Reshaping the Deposit Guarantee Fund governance. The Amendment restructures the governance arrangements of the Deposit Guarantee Fund to align decision-making, streamline institutional accountability and ensure faster, clearer responses in times of stress.

Why these changes matter

Secondary Saccos and umbrella bodies that provide liquidity and shared services play a pivotal            role in the Sacco ecosystem. They pool funds, provide short-term liquidity, and facilitate services  that smaller Saccos rely on. Weak oversight of these functions creates systemic risk: poor        liquidity management, opacity of inter-Sacco exposures, or governance breakdowns can quickly      spread stress across multiple member Saccos.

The Bill’s measures are therefore designed to:

  • Improve transparency around pooled liquidity and inter-Sacco exposures.
  • Ensure that entities providing shared services meet minimum governance and conduct standards.
  • Give SASRA the legal tools to monitor, intervene and enforce compliance; and
  • Strengthen the Deposit Guarantee Fund’s governance so it can act decisively and accountably when member Saccos face distress.

Practical implications for secondary Saccos (e.g., KUSCCO and similar institutions)

Secondary Saccos and central service providers will need to take immediate and practical steps to         align with the proposed requirements:

  • Create and fund a dedicated liquidity reserve account that meets SASRA’s expected criteria and reporting requirements.
  • Revise governance frameworks — including board charters, risk appetite statements, internal controls and conflict-of-interest policies — to match the mandatory code of conduct.
  • Strengthen compliance and reporting functions to ensure timely, accurate information flows to SASRA and to members.
  • Reassess service agreements with member Saccos to ensure contractual clarity on exposures, collateralization and contingency arrangements.
  • Engage with regulators and members proactively to influence implementation details and to manage member expectations.

         Reel Informatics’ Recommendations for stakeholders

  1. For SASRA: publish clear guidance and transitional arrangements that enable orderly compliance — including templates for liquidity reserve accounts, timelines for implementation and supervisory expectations.
  2. For secondary Saccos: begin internal readiness programmed now — governance reviews, capital and liquidity planning, and targeted training for boards and senior management.
  3. For primary Saccos / members: demand transparency on how pooled funds is managed, seek assurance on governance improvements, and participate in consultations to protect members’ interests.
  4. 4.For policymakers: ensure that reshaped Deposit Guarantee Fund governance balances speed of action with checks and transparency