Government lifts suspension on new SACCO registrations with tougher entry rules

The government has opened the door for new Savings and Credit Co-operative Societies (SACCOs) to be registered again, ending a suspension that had temporarily halted entry of fresh players into the sector while a full review of the legal and regulatory structure was carried out.

Principal Secretary for Co-operatives Patrick Kilemi announced that the freeze has been lifted following the completion of a detailed assessment by a Committee of Experts set up by Cabinet Secretary for Co-operatives and MSMEs Development Wycliffe Oparanya. He said the move is meant to strengthen the co-operative space while still allowing growth.

Taking to his X account on Wednesday, Kilemi confirmed that the Ministry of Co-operatives and MSMEs Development, through the Commissioner for Co-operatives, has officially removed the suspension on registration of new SACCO societies. He described the decision as a key step in reshaping the sector after the review process.

“This follows the completion of a review of the legislative and regulatory framework by a Committee of Experts appointed by the Cabinet Secretary, Hon. FCPA Dr Wycliffe Oparanya, EGH,” Mr Kilemi stated.

He further added that the decision takes effect immediately, meaning new SACCOs can now apply for registration, but only if they meet tougher conditions aimed at improving stability, governance, and long-term survival.

“Effective immediately, new SACCOs can now be registered. However, applicants must meet stricter requirements to ensure sustainability and proper governance,” he stated.

Under the updated framework, anyone seeking to start a SACCO will be required to show that they have a fully equipped and accessible physical office, which must also have at least one employee. The government says this is meant to ensure that SACCOs are properly grounded and accessible to members.

Applicants will also need to present institutional capital of at least Sh1.2 million to support setup and early operations, not including member deposits. In addition, they must submit a detailed three-year business plan together with cash flow projections to show how the SACCO will remain viable.

The new rules also require aspiring SACCOs to demonstrate capacity to raise at least Sh10 million in member deposits within their first year of operation. Authorities say this is meant to test financial strength and member confidence before full operation.

Kilemi also noted that all applicants will be expected to comply with Sections 4, 5, and 6 of the Co-operative Societies Act, alongside other rules that govern the sector. He directed that all applications for registration be submitted through the respective County Director for Co-operatives.

The lifting of the suspension now marks a new phase for the co-operative sector, with the government pushing for expansion while at the same time tightening oversight, capital requirements, and governance standards for new entrants.