Sasra Revokes Licenses for 5 Credit Unions

Credit unions in the country that have been facing liquidity challenges and corporate governance challenges and that were unable meet the obligations required of them have been revoked of their licenses by the Sacco Societies Regulatory Authority (Sasra).

The revocations mean that the Sacco’s will no longer receive deposits from the public. The Affected Sacco’s include Ufundi Sacco, Transcom Sacco, Nest Sacco, Green Hills Sacco and Maono Daima Sacco. Orders from Sasra stated that the Sacco’s to immediately stop offering banking services including salary processing, operating savings and current accounts, automated teller machine (ATM) services, mobile banking, and money transfer services and only concentrate on office services only.

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Sasra disclosed that the stated Sacco’s were not paying deposits to the public when the agreed time was due. The regulatory body also added that Serious corporate governance lapses have been noted to be affecting the Sacco’s.

A total of nine Sacco’s have had their licenses withdrawn since 2014, giving Sasra a fresh impetus to the planned setting up of a centralized lending facility for credit unions, akin to commercial banks’ interbank market, to help societies manage short-term liquidity challenges.

The five deregistered Sacco’s have a combined membership of 18,769 savers, Sh1.9 billion in assets, Sh641million in deposits and a loan book of Sh517 million.

The Kenyan Sacco industry’s loan book grew nearly a fifth to hit Sh228.5 billion by December 2014. A total of 3.01 million Kenyans belong to credit unions.

Deposit-taking co-operatives held assets worth Sh301.5 billion and Sh205.9 billion customer deposits in the year under review.

The withdrawal of deposit taking licenses means Ufundi, Transcom, Nest, Green Hills and Maono Daima will now be under the jurisdiction of the Commissioner for Co-operative Development.

Article by Vera Shawiza.