Govt Announces Nationwide Renaming of Matatu Saccos

Cooperatives Cabinet Secretary Wycliffe Oparanya has announced that his ministry will be undertaking the renaming of matatus SACCOs following confusion that emerges over the nature of their operations.

Speaking during the launch of the Sacco Societies Regulatory Authority (SASRA) report on Thursday, September 25, the CS stated that all matatu SACCOs that do not give loans or have a savings structure for their members will be transformed into transport cooperatives.

Meanwhile, for matatu SACCOs that give loans and take deposits from their members, they will maintain their names while also applying to be regulated by SASRA.

"In view of the foregoing and to bring sanity into the SACCO industry, the ministry is going to transform all existing matatu/ PSV SACCOs that are not engaged in savings and credit business into transport cooperatives or Trans Coops," read the statement in part.

"Those engaged in the credit and savings business will be required to apply to be regulated by SASRA or else face deregistration." 

Oparanya explained that the use of the name SACCO was bringing confusion among Kenyans, hence the need to undertake the reforms.

''I do know that there are several Transport Cooperatives, which are currently registered or operating as Matatu or PSV SACCOs," the CS stated.

"These entities are not SACCOs because they are not engaged in the mobilisation of deposits and/or intermediating the deposits as credit. They are simply an association of people coming together to operate a transport business or manage routes as required by the National Transport Safety Authority (NTSA)." 

Other Directives for SACCOS Across the Country

In his speech, the CS also stated that the government was keen to ensure that small SACCOS merge with other big SACCOs to make them more financially viable.

Equally, he added that the regulated credit unions will be required to establish a mechanism to ensure that members have opportunities to voice their interests in decision-making meetings, such as Annual General Meetings.

"No SACCO shall be allowed to borrow from external sources to pay dividends, and henceforth any SACCO intending to procure an external loan must obtain written approval from the Commissioner, subject to compliance with the prescribed ratios," he announced.

Directives on Financial Books 

The CS also directed the Commissioner of Co-operatives.

1. Ensure that all financial reports and statements are countersigned by the Chief Executive Officers and Finance Officers who prepared them, in addition to the Board of Directors. This will hold both management and the Board of Directors responsible for the disclosures in the statements.

2. Ensure that internal auditors of SACCOs render their opinions on the financial statements and reports, prior to such financial statements being subjected to external auditing.

3. Institute appropriate actions against external auditors who internally fail to render external auditing services in accordance with the SACCO Societies Act and Regulations, including referral of such external auditors to ICPAK for additional sanctions