The government published new regulations for Non Deposit Taking (NPT) saccos to meet by the end of June this year.
The SACCOs were to seek for an authorization to operate from the Saccos Societies Regulatory Authority (SASRA) following the publication regulations 2020, which to effect on January 2021.
Coming to the tail end of the compliance on Wednesday , SASRA Ag. CEO Peter Njuguna said soon they will be issuing the first batch of licenses having received over 100 applications.
He however clarified that as much as they have been receiving the applications, Data shows that as much as 150 saccos that have compiled their data sheets with them, they have not met the threshold on specified Depositing taking saccos.
“We are however happy with the compliance of licensing which is the first entry point and is the first step before walking the rest of journey”, he said
Njuguna encouraged SACCOs to keep on applying saying as SASRA they do not expect them to be 100 percent compliance since there are areas that saccos need to work on.
COVID 19, he explained has been here and has seen business encountering challenges such as loss of income and therefore as SASRA they are trying to balance so that they facilitate saccos even as they comply by engaging them , guiding them to know their weaknesses in case of their performance standards.
“There is a standard to be met and as you compare saccos and even as they they grow the business the growth has to be on a sound way.
Njuguna who was speaking during a cooperative supervisory and Audit workshop over the weekend said the meeting was timely for NDT saccos as there is a remarkable shift in terms of governance.
“The regulations for NDT has given the supervisory committee expanded mandate to do the job that is normaly done by Audit and this is critical in that it is providing oversight to what the board and management are doing therefore having a platform to get clarity on what is expected and doing things not over and over again but differently”, the CEO said
For Audit committee, Njuguna added that Deposit Taking (DT)saccos have even a greater responsiblity to provide assurance to members that the policies and strategies they haveas well as the resolutions passed on the AGM are being implemented and correctly so..
“Supervisory committee members are unique and they derive directly their money from members and report directly to them ,therefore in terms of strengthening governance and for NDTs saccos that are small, they do play a pivotal role”, he said .
Njuguna went ahead and said that although the regulations done have a vacuum and have to be complied with since there are consequences, he assured SACCOs that its not a bullet kind of consequences and that the most important thing is for them to first apply for the license
“There are incidences where capital is not there and some SACCOS have plan , and as long as they are serving their members, the objective of the government is not to close them but to bring them to a new operating standard which is demanding”, the CEO said.
He urged SACCOs to continue submitting their applications which is the first step and then enable the conversation with the authority to start. “Our mandate as a SASRA first is to advise, walk with the insitutions to enable them understand and give them time before before deterrent measures come into place”, he said .
Njuguna clarified that the law provides for provisional authorisation of 12 months in the jouney fo compliance under the new regulatory framework.
When it comes compliance date with is 30th of June, the CEO clarified that this does not mean that the process will be done by then saying they have until September to process since they have to be engaging and communicating with the saccos.
“ We have seen that the saccos response is good so far as they are still coming to register”, Njuguna said .
Cooperative Alliance of Kenya (CAK) CEO Daniel Marube encouraged NDT saccos to comply with the regulations saying they will strengthen systems and governance of the sector.
He said that as SACCOs they, are encouraged and have discussed with SASRA not to shut out those saccos that are not ready and do not apply by 30th of June.
“The Saccos that feel they are should discuss with regulator. We want SASRA to hand hold the small saccos guide them on how they can walk on this journey of compliance”, he said