Savings and credit cooperatives, or SACCOs, are going to be subject to changes that the government intends to implement in order to improve corporate governance.
Significant ideas include imposing term limitations on SACCO directors and mandating the use of several auditors in order to ensure objective financial information reporting.
Wycliffe Oparanya, the Cabinet Secretary, announced these reforms, claiming that the existing system, in which a single auditor is responsible for large SACCOs, undermines the auditors’ independence and objectivity.
Recent scandals involving SACCOs, such as the Metropolitan Sacco and the Kenya Union of Savings and Credit Co-operatives (KUSCCO), in which mismanagement resulted in large financial losses, have prompted this approach.
After an examination found that KUSCCO had suffered losses of over Ksh 6 billion as a result of corruption and unlawful acts, the government decided to terminate the board of directors in May of 2024.
