LICENCING OF SACCO SOCIETIES IN KENYA

INTRODUCTION

In Kenya, Saccos are regulated by the Cooperative Societies Act and the Sacco Societies Act.

A Sacco has to apply for a licence in accordance with Section 24 of the Sacco Societies Act Cap 490B Laws of Kenya .

Once a Sacco decides to be a deposit taking business in Kenya, it shall write to the Sacco Societies regulatory Authority (SASRA) for purposes of issuance of a licence using the prescribed form. This form as to be accompanied by:-

1. Sacco's certificate of registration.
2. Bylaws of the Sacco society.
3. Information to be given relating to the Sacco's place of business and branches is crucial to ascertain legitimacy.
4. Minimum capital requirements.
5. Prescribed fees.
6. A report entailing: objectives of the deposit-taking Sacco society business, membership and share capital, economic and financial environment, organizational structure and management; and financial and risk analysis.

There are cases tat the Cabinet Secretary refuses to grant the licence but a Sacco has a right of appeal within 30 days upon refusal.

Once the requirements are met and no notification was sent for refusal of issuance of a licence, SASRA will consider the Application and grant the licence upon payment of prescribed fees. This falls under section 25 of the Sacco Societies Act Cap 490B Laws of Kenya. The licenses are paid for annually. Furthermore, if a Sacco Society fails to start the deposit taking business within 12 months one is required t make a fresh application.

CONDITIONS OF A LICENCE

A licence is restricted by limiting the duration of the licence for a period not exceeding one year.

REVOCATION OF A LICENCE

SASRA can revoke a licence by notice in writing to a Sacco Society if the Sacco:-

1. Ceases to carry on deposit-taking business in Kenya or goes into liquidation or is wound up or is otherwise dissolved or deregistered.
2. Fails to comply with this Act, or any rules, regulations, orders or directions issued under the Act or any condition of the licence.
3. Fails to pay the annual license fees.
4. Does not hold at least fifty percent of the capital requirements as may be prescribed in the regulations.
5. Has knowingly engaged in serious criminal or fraudulent acts that are likely to cause insolvency, substantial dissipation of assets or earnings or may otherwise weaken the deposit-taking Sacco society's condition or seriously prejudice the interests of the deposit-taking Sacco society's members.

Where the licence of a Sacco society is revoked or cancelled, the Sacco society shall not be entitled to any refund of the license fee in respect of any unexpired period of the licence.

A Sacco society have a right to appeal within 30 days of notification of revocation of the licence.

The Cabinet Secretary may reverse the decision of the Authority only if:

1. SASRA failed to follow required procedures in making its decision.
2. SASRA's decision was contrary to this Act and the regulations.
3. There was no factual basis for the Authority's decision.
4. Based on a review of the record, the Authority committed a manifest error in its assessment of facts, or abused its discretion in taking its decision.

The registration of a Sacco Society, the license of which is revoked under the provisions of this Act, shall be cancelled in accordance with Section 62 of the Co-operative Societies Act.

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