Sacco Amendment Bill 2025 : The Sacco Societies Amendment Bill, 2025 is currently under review by the Kenyan Parliament. The Bill remains subject to debate and potential revisions before it can be enacted into law. Its overarching aim is to strengthen the regulatory and operational framework governing Savings and Credit Cooperative Organizations (SACCOS) in Kenya. The proposed reforms focus on enhancing financial stability, promoting efficiency, and expanding access to financial services across the cooperative sector.
Key Highlights of the Sacco Amendment Bill 2025
Modernization of SACCO Operations
The Bill prioritizes modernization, particularly for smaller SACCOs. It introduces measures that encourage the adoption of financial technology (fintech) solutions, enabling SACCOS to provide faster, more efficient, and member-focused services.
Shared Services Framework
One of the key proposals is the introduction of a shared services framework. This will allow SACCOS to pool resources, collaborate on various services, and adopt shared technological infrastructure. The model is designed to reduce operational costs, promote innovation, and help smaller SACCOS achieve economies of scale while maintaining their independence.
Central Liquidity Facility (CLF)
The Bill proposes the establishment of a Central Liquidity Facility. The CLF will provide short-term financing to SACCOs experiencing temporary liquidity challenges. More significantly, it will enable SACCOs to participate directly in the national payment system, ensuring smoother inter-SACCO transactions and faster response to members’ financial needs. This facility is also expected to strengthen the overall resilience of the SACCO sector.
Risk-Based Supervision
The reforms emphasize the adoption of ICT-based regulatory reporting. By leveraging technology, SACCOs will be able to achieve faster, more accurate, and efficient reporting. This approach is expected to improve oversight while easing compliance burdens.
Constitutional Alignment
The Bill aligns the roles and responsibilities of the Cabinet Secretary and the Controller of Budget with the Constitution. This ensures that governance and oversight remain consistent with Kenya’s legal framework.
Addressing Legal Challenges
The Sacco Societies Amendment Bill, 2025 also responds to a previous court ruling that nullified an earlier version of the Bill due to lack of Senate involvement. The new draft ensures participation by both the National Assembly and the Senate, thereby upholding constitutional requirements.
Sacco Amendment Bill 2025 : Expected Impact on SACCOs
Improved Efficiency
Through shared services and technology adoption, SACCOs will streamline their operations, reduce costs, and deliver services more effectively.
Enhanced Financial Stability
The Central Liquidity Facility will provide a financial safety net, helping SACCOs withstand liquidity shocks and safeguard member deposits.
Increased Competitiveness
By embracing modern technology and collaboration models, SACCOs will be better positioned to compete with banks, microfinance institutions, and fintech players in Kenya’s financial landscape.
Reduced Compliance Burden
The shift to ICT-based reporting will simplify regulatory compliance, freeing up SACCOs to focus on innovation and service delivery rather than administrative requirements.
Conclusion
If enacted, the Sacco Societies Amendment Bill, 2025 will mark a significant milestone in the evolution of Kenya’s cooperative financial sector. By modernizing operations, introducing collaborative frameworks, and ensuring constitutional alignment, the Bill positions SACCOs for sustainable growth. The reforms not only strengthen financial resilience but also reinforce the role of SACCOs as vital drivers of financial inclusion and empowerment in Kenya.
By Brian Barasa
