The government has launched a crackdown on officials of Savings and Credit Cooperatives (SACCOs) who have been accused of mismanaging contributions.

Co-operatives Cabinet Secretary Simon Chelugui has issued a stern warning to those involved in fraudulent activities, stating, “Anybody who will be found to have engaged in fraudulent activities will face the full wrath of the law.” The directive follows complaints from SACCO members regarding the questionable operations of these financial institutions.

Chelugui, speaking during a consultative meeting with farmers and stakeholders in Nairobi County, emphasized the government’s commitment to upholding financial integrity and ensuring the proper management of funds within SACCOs.

“We will continue to uphold the highest standards of financial integrity and ensure the financial health of all institutions under its purview through transparent, accountable and well-run financial cooperatives,” he stated.

Furthermore, the government has ordered an inquiry into suspected violations of SACCO regulations by the Kenya Union of Savings and Credit Cooperative Society (KUSCCO), the umbrella body for SACCOs. Chelugui has directed an audit to be conducted on KUSCCO to ascertain the credibility of the issues raised by its members. “KUSCCO is the umbrella body for Saccos and we’re fully cognizant of the big role the organization plays in empowering Saccos through training among other things,” Chelugui noted.

The government’s decisive actions come as the Sacco Societies Regulatory Authority (SASRA) revoked the licenses of two financial institutions, Kenya Midland Sacco Society and Jacaranda Sacco Society Limited, suspending them for one year due to their failure to undertake deposit-taking business. This crackdown aims to restore confidence in the financial sector and protect the interests of SACCO members and the public.