The cabinet has approved amendments to the Sacco Societies Act, 2008, following a wave of losses in recent times.

In a despatch after a cabinet meeting on Tuesday, March 11, 2025, the cabinet said the changes aim to modernise financial and technological operations, particularly benefiting smaller saccoss.

“In a bid to enhance the stability, efficiency, and competitiveness of Kenya’s Savings and Credit Cooperatives (saccoss), the Cabinet has approved amendments to the Sacco Societies Act, 2008. The proposed reforms, outlined in the Sacco Societies (Amendment) Bill, 2023—now before Parliament—aim to modernise financial and technological operations, particularly benefiting smaller saccos,” the despatch read in part.

Key reforms include a sacco Shared Services Framework, allowing the financial institutions to pool resources, adopt fintech solutions, and enhance cooperation, while maintaining operational independence.

The cabinet has also proposed a Central Liquidity Facility that will facilitate inter-sacco transactions, short-term lending, and participation in the National Payment System, while a centralised data repository will improve regulatory oversight and efficiency.

“Reforms to the Deposit Guarantee Fund will ensure better protection of sacco deposits, reduce government bailout risks, and strengthen the cooperative financial sector. By lowering operational costs, fostering innovation, and boosting public confidence, these reforms position saccos as key players in Kenya’s financial inclusion and economic empowerment agenda,” the cabinet added.

Loss of billions

This comes at a time it was revealed that the Kenya Union of Savings and Credit Cooperatives (Kuscco) could have lost up to Ksh5.3 billion to bad loans issued to saccos and senior officers.

Saccos which have been hit in the heist include Mhasibu Sacco whic is set to lose over Ksh480 million, Kimisitu Sacco will lose over Ksh353 million, Law Society of Kenya Sacco (Ksh19 million), Stima Deposit Taking Sacco(Ksh108 million) and Balozi Sacco Society (Ksh437.5 million).

Some of the sacco societies have been forced to write off their deposits with Kuscco, taking a hit at their members’ deposits.