Dormant Saccos that are no longer active will be struck off the register and liquidated, Co-operatives and MSMEs Cabinet Secretary Wycliffe Oparanya has warned.

Speaking during the launch of the 2024 Sacco Supervision Report, Oparanya said all Sacco societies must submit their returns to the Commissioner for Co-operatives before the end of the month or face deregistration.

He also hinted at the possibility of merging weaker Saccos to strengthen the sector.

The report shows that Sacco membership grew to 7.3 million in 2024, up from 6.8 million in 2023. Of these, 6.8 million belong to deposit-taking Saccos, while about 514,000 are in non-deposit-taking societies.

Although membership is rising, the number of registered Saccos has fallen to 355. Oparanya said that figure could shrink further as the government cracks down on dormant or poorly governed institutions.

“Those which are only registered by name and are not active will be deregistered and liquidated by the Commissioner for Co-operatives as required by the law. Those which are active and viable will be required to be supervised by SASRA. Otherwise, they shall equally be de-registered and liquidated,” Oparanya stated.

He also signalled possible reforms to improve governance, including stricter rules on who qualifies to serve on Sacco boards. Auditors, both internal and external, were singled out for enabling financial mismanagement in some societies.

The CS directed that internal auditors must give their assessment of Sacco’s financial statements before they are reviewed by external auditors.

He warned that external auditors who fail to do their work properly will be reported to ICPAK for disciplinary action.

Despite these challenges, the sector’s performance has been strong. According to the supervision report, the combined asset base of Saccos rose to Ksh 1.08 trillion in 2024, marking a major milestone for the cooperative movement.

However, Oparanya noted that many smaller Saccos still lack the capacity to comply with stricter regulations and to invest in modern systems. He encouraged them to consider merging or adopting shared services to reduce costs and improve efficiency.

The government has also raised concerns about transport cooperatives that operate as Saccos but do not offer savings and credit services. Oparanya said such groups may be reclassified or removed from the Sacco register.

The proposed Co-operatives Bill of 2024 aims to strengthen governance in the sector by setting higher leadership standards and introducing stiffer penalties for non-compliance.

Oparanya stressed that the government’s goal is to protect members’ savings and ensure that only active and well-run Saccos continue to operate.