If Your Money Is in a SACCO, Here’s How Kenya’s New Amendment Bill Could Change the Rules Behind Your Savings.

The Sacco Societies (Amendment) Bill, 2025 has sparked debate online, with some arguing that the proposed central liquidity structure could allow government to access more than Sh1 trillion in SACCO member savings for infrastructure projects but a closer reading of the Bill shows a different picture.

The Bill is trying to create a regulated central liquidity and shared services system for SACCOs. It allows 30 or more licensed or authorised SACCO societies to form a secondary co-operative society. That secondary society may hold liquidity reserve accounts for member SACCOs, receive a prescribed minimum liquidity amount, take deposits from member SACCOs, offer short term lending to member SACCOs, facilitate inter-SACCO lending, settle payment transactions and provide shared services platforms. It may also invest in Government securities.

In practice, this means SACCOs would also have a formal structure for managing cash needs and supporting each other when liquidity pressure arises, such as during periods of high loan demand or increased withdrawals. That could reduce overreliance on costly bank credit lines.

Another important part of the Bill is deposit protection. If a SACCO fails, members would be compensated up to Sh100,000 each from the Deposit Guarantee Fund. This covers deposits, not shares. If a member has loans with the SACCO, those amounts may first be offset before compensation is paid.

KUSCCO is the clearest example of why the Bill matters. It showed what can happen when a secondary SACCO handles large amounts of money from member SACCOs without a clear enough supervisory framework. A forensic audit exposed losses of about Sh13.3 billion, while Sh24.8 billion collected as deposits from 247 SACCOs was put at risk. The Bill tries to close that gap by putting central liquidity and shared services structures under clearer SASRA licensing, reporting and supervision rules.