Non-deposit taking Saccos will now be under the regulation of the Sacco Societies Regulatory Authority (SASRA). This is after the policy to bring Non-Deposit Taking Saccos under the regulatory oversight of SASRA having been prepared and is ready for rollout. With the Regulations 2020 having taken legal effect from January 1, 2021, all Sacco Societies undertaking the specified non-deposit taking (BOSA) business are required to comply, in the current window to June 30th, 2021.
CS Munya whose docket the Saccos fall under, on the 5th May 2020 published the Sacco Societies (Non-Deposit Taking Business) Regulations, 2020, through Legal Notice No.82 of 2020. Known as the Regulations 2020, this document was designed to prescribe prudential and market conduct measures to be complied with by all Sacco Societies undertaking the specified non-deposit taking business (popularly referred to as BOSA (Back Office Service Activities) business in Kenya). These Saccos collect deposits that are only withdrawable on the exit of the member, and not at any other time, like their Deposit-Taking counterparts who receive demand deposits like banks.
The Regulations specified a number of BOSA businesses, as the non-deposit taking Saccos as defined by Section 3(2) of the SACCO Societies Act.
- Non-Deposit Taking business (BOSA) in which the total non-withdrawable deposits from members is equal to or exceeds the sum of one hundred million shillings (KSh100 million)
- Non-Deposit Taking business (BOSA) in which the SACCO Society mobilises membership and subscription to its share capital through digital or other electronic payment platforms; or
- Non-Deposit-Taking business (BOSA) in which the SACCO Society mobilises membership and subscription to its share capital from persons who are ordinarily resident outside the country.
Non-Deposit Taking Saccos being targeted under the Regulations 2020 are estimated at about 3626 as at December 31, 2019. These are active across sectors of the economy and are in all parts of the country with a membership of about 1.5 million, KShs. 188 billion in assets funded by member deposits of KSh140.54 billion. This means SASRA will have a bigger mandate compared to the 175 Deposit-Taking Saccos that are currently being regulated by the authority.