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Sacco Societies Ammendment Bill 2016

It's back to class for sacco board members in proposed law

Sacco board members will be required to take continuous professional tests by the industry regulator

Nation Media Wednesday August 10 2016

 

Sacco board members will be required to take continuous professional tests by the industry regulator who is pushing to improve corporate governance in the Sh300 billion sector.

Sacco Societies Regulatory Authority (Sasra) seeks to equip board members with leadership and financial skills to enable them query management decisions.

“The authority may impose minimum standards on significant members and officers of a sacco society as prescribed, including mandatory continuous or minimum professional development courses, training and certification which every director of a sacco society must undertake,” reads the Sacco Societies (Amendment) Bill 2016.

Sacco board officials are elected through a popular vote during annual general meetings by members who may not demand competence or gauge how they fit into the co-operatives management.

Sasra is following in the path of fellow regulator, Retirement Benefit Authority (RBA), that requires all trustees to take a standard course before they are confirmed.

Saccos will also have to get approval from the regulator before amending their by-laws in a move meant to give Sasra a grip on the running of licensed co-operatives.

Currently the societies require only the approval of commissioner of co-operatives who is in charge of non-deposit taking saccos.
“A deposit-taking sacco society shall not amend its registered by-laws or any provision thereof without the prior written approval of the authority,” reads the amendment bill.

Notably it would take at least a year for a sacco to change a by-law that the authority opposes, given the change has to be approved by members in an annual general meeting.

The sacco industry has recorded rapid growth following rise in public confidence in the sector.

FAR-REACHING REFORMS

The Sasra, created in 2010, has pushed Saccos to strengthen their corporate governance structures and increase capital adequacy — two issues that had bedeviled the sector for decades.

The authority is seeking far-reaching reforms using the first amendment Bill for the sector, which include checking the suitability of executive directors.
The Bill requires Sasra to conduct a ‘‘fit and proper’’ test on directors of licensed Sacco to enhance corporate governance in a sector billed as an alternative to banks.

Sacco directors who might have defaulted on their bank loans are likely to be pushed out of their executive positions with the authority proposing checks on their financial status or solvency.

Sasra also seeks to lock out persons who have held a directorship in a sacco that collapsed from serving in management or on the board of any other credit union.

Corporate governance has become a major issue following recent collapse of financial institutions including banks and saccos.

ISO 9001

KUSCCO QUALITY POLICY

We commit to consistently promote SACCOs through advocacy and provision of quality technical and financial products that exceed the members’ expectations.
We shall comply with the statutory requirements and actively pursue continuous improvement of the ISO 9001:2015 Quality Management System (QMS) processes, capabilities and effectiveness.
In pursuit of our commitment we shall ensure that the quality policy and objectives that have been established and communicated to the Union employees shall be reviewed annually in accordance with the stipulated framework and quality standards.”