The Sacco Societies Regulatory Authority (SASRA) is a pivotal institution in Kenya’s cooperative sector. Established in 2010 under the Ministry of Industrialization and Enterprise Development, SASRA has played a critical role in ensuring the soundness, transparency, and sustainability of Deposit-Taking SACCOs (DT-SACCOs).
As Kenya’s SACCO sector continues to grow and mobilize domestic savings, SASRA has become instrumental in instilling public confidence while promoting economic growth. This article dives deep into SASRA’s functions and how it strengthens the cooperative ecosystem.
What is SASRA?
SASRA is a statutory body established under the Sacco Societies Act of 2008 to license, regulate, and supervise DT-SACCOs in Kenya. The authority ensures that SACCOs operate in compliance with regulations that safeguard members’ deposits and promote financial inclusivity.
With over 175 licensed SACCOs, the sector boasts an asset base of over KES 650 billion, highlighting its critical role in Kenya’s economy.
Key Functions of SASRA
1. Licensing Deposit-Taking SACCOs
SASRA is mandated to issue licenses to SACCOs conducting deposit-taking business in Kenya. This process includes:
- Issuance of Licenses: Only SACCOs that meet regulatory requirements receive operational licenses.
- Revocation of Licenses: SACCOs that fail to comply with regulations may have their licenses revoked.
- Publication of Licensed SACCOs: SASRA publishes an annual list of licensed SACCOs, fostering transparency and public trust.
2. Regulating and Supervising SACCOs
SASRA ensures SACCOs operate within the legal framework through rigorous regulation and supervision. This includes:
- Inspection: Conducting regular on-site and off-site inspections to assess compliance.
- Enforcement: Taking corrective action against SACCOs that violate regulations, such as imposing sanctions or suspending operations.
3. Levying Contributions from SACCOs
SASRA collects contributions from SACCOs to finance its regulatory activities. These contributions are calculated based on each SACCO’s financial size and operations.
4. Promoting Financial Inclusivity
SASRA advocates for the equitable distribution of DT-SACCOs across Kenya to enhance access to financial services in underserved regions. This initiative aligns with Kenya’s goal of increasing financial inclusion, particularly in rural areas.
5. Managing the General Fund
The authority oversees the management of the General Fund, which comprises:
- Proceeds from levies paid by SACCOs.
- Funds from donations, loans, or other sources.
The fund is used to finance SASRA’s operations, including supervisory and regulatory activities.
6. Protecting Member Deposits
SASRA protects SACCO members’ deposits through the Deposit Guarantee Fund (DGF), which provides a safety net for members’ savings up to KES 100,000 per member in case a SACCO faces insolvency.
7. Imposing Sanctions for Non-Compliance
SACCOs failing to meet compliance standards face stringent sanctions, including:
- Suspension of lending and investment activities.
- Prohibition from acquiring additional land or buildings.
- Ban on accepting further deposits or credit lines.
8. Managing Liquidity and Asset-Liability Policies
SASRA annually formulates and reviews liquidity policies to ensure SACCOs maintain healthy liquidity ratios. This helps mitigate risks related to asset-liability mismatches.
9. Monitoring SACCO Financial Performance
SASRA requires SACCOs to submit monthly financial reports by the 15th of each month, including:
- Statements of Income and Expenditure.
- Statements of Financial Position.
These reports enable SASRA to monitor financial performance and detect early warning signs of financial distress.
10. Imposing Financial Penalties
SASRA penalizes SACCOs that fail to submit accurate reports or comply with reporting timelines. This discourages non-compliance and fosters accountability.
SASRA’s Impact on Kenya’s SACCO Sector
1. Enhancing Public Confidence
By enforcing transparency and sound financial practices, SASRA has boosted public trust in SACCOs, encouraging more Kenyans to save and invest through these institutions.
2. Strengthening SACCO Governance
SASRA’s regulatory framework ensures that SACCOs adhere to principles of good governance, reducing risks of mismanagement and fraud.
3. Promoting Financial Inclusion
Through initiatives to increase the geographical spread of SACCOs, SASRA has significantly contributed to financial inclusivity, particularly in rural areas where access to banking services is limited.
4. Safeguarding Members’ Savings
The Deposit Guarantee Fund protects millions of Kenyans’ savings, fostering confidence in SACCOs as safe investment channels.
Challenges Facing SASRA
1. Evolving Financial Landscape
The rise of fintech and digital lending platforms presents challenges for SASRA as it seeks to adapt its regulatory framework to include emerging financial models.
2. Non-Compliant SACCOs
Some SACCOs resist regulatory requirements, posing risks to members and the sector’s stability.
3. Limited Resources
As the number of SACCOs grows, SASRA faces resource constraints in effectively supervising all institutions.
4. Public Awareness Gaps
Many Kenyans remain unaware of SASRA’s role, leading to underutilization of its protections and services.
SASRA’s Vision for the Future
1. Digitization
SASRA is exploring digital tools to enhance efficiency in licensing, supervision, and reporting processes.
2. Broadening Regulatory Scope
There are ongoing discussions to expand SASRA’s oversight to include non-deposit-taking SACCOs, which currently operate outside its regulatory framework.
3. Capacity Building
SASRA plans to invest in training programs for SACCOs to strengthen governance and financial management.
SASRA Contacts
- Physical Address: UAP Old Mutual Tower, 18th & 19th Floor, Upper Hill Road, Nairobi
- Phone: +254 (20) 2935101
- Email: info@sasra.go.ke
- Website: SASRA Official Website
