State lifts suspension on registration of new SACCOs, sets strict rules for applicants

The government has lifted the suspension on the registration of new Savings and Credit Cooperative Organisations (SACCOs) societies, paving the way for fresh applications under stricter conditions aimed at strengthening governance, accountability and financial stability in the sector.

The suspension had been announced earlier in May by Cooperatives Cabinet Secretary Wycliffe Oparanya and was expected to last for three months.

However, in a statement, Oparanya confirmed that the suspension has now been lifted with immediate effect.

“I am pleased to announce that the Ministry of Co-operatives and MSMEs Development, through the Commissioner for Co-operatives, has lifted the suspension on the registration of new SACCO societies with immediate effect," he said.

He noted that the decision follows a review of the legislative and regulatory framework governing the cooperative sector by a committee of experts appointed by the ministry.

Oparanya noted that while new registrations have resumed, stricter conditions will now guide approval to ensure only stable and well-prepared SACCOs are licensed.

“As we continue strengthening the co-operative movement, the registration of new SACCOs will now be subject to enhanced requirements aimed at promoting sustainability, accountability, and good governance," he said.

To qualify for registration, applicants must now demonstrate the existence of a fully equipped and accessible physical office with at least one employee, and have a minimum institutional capital of Sh1.2 million for formation and initial operations, excluding member deposits.

They should also submit a comprehensive three-year business plan and cash flow projections, demonstrate the capacity to mobilise at least Sh10 million in deposits within the first year of operation and comply fully with Sections 4, 5 and 6 of the Co-operative Societies Act and all relevant regulations.

"All applications for registration will now be submitted through the respective County Director for Co-operatives," Oparanya said.

The earlier decision to temporarily halt new registrations aimed to clean up the sector and strengthen oversight.

Oparanya emphasised that the measure was necessary to rein in “briefcase SACCOs”, which he described as often unregulated and often fraudulent entities that undermine trust and stability in the sector.

He added that the suspension was part of efforts to restore order and ensure only credible cooperatives operate within the legal framework.