MPs Warn Kenyan Could Lose Savings Under New SACCO Payout Plan

Jukwaa

🇰🇪 Breaking It Down

During a meeting with officials from the SACCO Societies Regulatory Authority (SASRA) on Tuesday, June 30, the Departmental Committee on Trade, Industry and Cooperatives argued that the proposed limit would leave members with larger savings exposed to significant financial losses.

According to the lawmakers, the limit would be disadvantageous as SACCOs remain a key source of affordable and accessible credit for many Kenyans, especially during emergencies.

They raised the concerns while considering the Sacco Societies (Amendment) Bill, 2025, which seeks to enhance protection of members’ savings and strengthen regulation of SACCOs.

📌 What You Need to Know

The Members of Parliament urged the regulator to adopt a more equitable deposit insurance model that offers better protection to depositors.

Under the framework, compensation paid from the Deposit Insurance Fund would be based on a member’s protected deposit, calculated as the total credit balance across all their SACCO accounts minus any outstanding loans, liabilities, or loan guarantee obligations owed to the SACCO.

Once the obligations have been settled, members of insolvent SACCOs will then be eligible to lodge claims with SASRA for payment of their protected deposits from the fund.

If the proposed payout limit is increased, Kenyans would be entitled to greater compensation, providing stronger protection for their savings should their SACCO collapse.

In addition to the payout, the Bill is pushing for stronger supervision and oversight to improve the safety of members’ deposits and the sustainability of SACCOs.

SASRA Chief Executive Officer David Sandagi said the proposed reforms, including the establishment of a deposit insurance fund, would boost public confidence in regulated SACCOs while making supervision more efficient.

📰 Source: Kenyans.co.ke

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