Registration of a Sacco in Kenya

There are two types of Saccos and their registration methods differ. The two types are:

i) Non- Deposit Taking Saccos:

These Saccos are governed by the Cooperative Societies Act. They collect savings from their members, which are exclusively used as collateral for loans provided to those members. These savings cannot be withdrawn; they are refunded only when a member leaves the SACCO. Additionally, they do not provide front office services, as members do not maintain accounts for deposits or withdrawals. Their operations are limited unlike the deposit taking Saccos

ii) Deposit Taking Saccos:

These are Saccos that offer traditional banking services such as savings, credit and ATM facilities. They are regulated by the SACCO Societies Regulatory Authority. (SASRA) The Sacco Societies Regulatory Authority (SASRA) established under the Sacco Societies Act 2008 with the responsibility to license Saccos to undertake Deposit Taking business and to supervise and regulate Sacco Societies.

The process of registration for these particular Saccos differs owing to the specific functions they serve. The discussion below delves into the registration process and the requirements for registration for respective Saccos.

i) Non- Deposit Taking Saccos

To successfully register a Non-Deposit Sacco in Kenya, one should meet the following are the requirements;

• Submit a formal request in writing to the Commissioner, expressing the intent to form a Sacco.
• Provide proposed names for search and approval.
• Clearly state the objects of the society.
• Have at least 10 members. Provide their names, occupations, and postal addresses.
• List the names, occupations, and postal addresses of the Chairman, Treasurer, and Secretary.
• Provide the proposed physical address, including road, town, and county.
• Provide a draft a constitution for the society.
• Complete and submit Form A (application for registration) and Form B (notification of registered office and address).
• Submit the proposed by-laws, a filled application for registration form, a supplementary information form, and an economic appraisal, all in four copies.
• Include minutes of the pre-cooperative Sacco meeting.

Upon receiving the documents, the Cooperative officer will arrange a meeting with the proposed members within a week. A minimum of ten members will constitute the quorum for this Pre-Cooperative SACCO Meeting. The primary focus of the meeting will be on pre-cooperative education. During this gathering, the promoters will select interim officials to oversee the registration process.

Procedure for registration

An application to register the society shall be made to the Commissioner in the prescribed form, and be signed by at least ten persons qualified for membership of the society. The application for registration is accompanied by four copies of the proposed by-laws of the society in English, and the information should be furnished to the Commissioner by the representative of the Sacco making the application.

If the Commissioner is satisfied that a society has complied with the relevant provisions of the Cooperative Societies Act, and its proposed by-laws are not contrary to the provisions of the Cooperative Societies Act or any rules, he shall register the society and its bylaws. The registration process takes at least two months.

A certificate of registration or of a provisional registration signed by the Commissioner shall be provided as conclusive evidence that the society is duly registered, unless it is proved that such registration of the society has been canceled or has been terminated.

Deposit Taking Saccos

If a Sacco plans to accept deposits from its members or customers, it must obtain a license from the Sacco Societies Regulatory Authority (SASRA), as required by Section 24 of the Sacco Societies Act 2008, which empowers SASRA to license and oversee the operations of deposit-taking Saccos. The registration process for these types of Saccos entails;

• There should be a submission a formal request to SASRA.
• For formally employed persons, they should include a confirmation letter from the employer.
• If the Sacco id for religious organizations, they should provide a certificate of incorporation and a letter of approval from the presiding clergy for religious-based common bonds.
• For Matatus or transport Saccos, they are mandated to include copies of at least ten logbooks of the proposed members’ vehicles.
• If the Sacco is for businessmen or a business community, the members should submit certificates of incorporation or business licenses from at least ten proposed members.
• Saccos for Marketing Societies require them to provide an introductory letter from the area chief confirming the common bond and expected production.
• For welfare and self-help groups seeking to convert to cooperatives, a copy of the registration certificate from the relevant ministry is required, while other informal organizations, a letter of introduction from the local Chief is necessary.

After completing these steps, one obtains a Certificate of Registration from the Registrar. This allows the Sacco to open a bank account, secure business permits, arrange NHIF and NSSF contributions, and handle tax matters. The newly registered Sacco must hold its first general meeting within one month of receiving the certificate.

If this meeting is not convened, the registration certificate may be revoked by the Commissioner for Cooperative Development. It is necessary to adhere to these procedures, thus successfully registering a Sacco in Kenya, which enables it to provide competitive financial services to its members, such as attractive loan interest rates.

The opinion expressed here in is purely that of the author. For further inquiries please contact our office on 0742028500