The SACCO Societies Regulatory Authority (SASRA) has begun stakeholders’ consultations on a proposed levy on the deposits of specified Non-Withdrawable Deposit Taking (NWDT) SACCOs to fund its expanded functions. According to the recently published draft SACCO Societies Levy Order, the regulator seeks to charge a levy of 0.165% on the total non-withdrawable deposits of the targeted SACCOs.
According to SASRA, the authority will use the consultations to collect feedback on the levy order from SACCOs, particularly those undertaking specified non-deposit-taking businesses. The latest developments follow SASRA’s issuance of 185 NWDT SACCOs with licenses to operate for the period January 1st, 2022, to December 31st, 2022. This followed the bringing, last year, specified NWDT SACCOs under the regulatory mandate of SASRA, which was already regulating 175 Deposit-Taking (DT) SACCOs. The latter already pay a levy of 0.175 per cent on their total deposits to SASRA to fund its regulatory and supervisory activities.
With their coming under SASRA’s mandate, the Non-WDT-SACCOs have been ushered into a more stringent regulatory regime. To this effect, they are expected to submit regular returns for offsite analysis to ascertain their compliance, be subjected to regular onsite inspections and be required to seek approvals for certain business initiatives they intend to undertake. All these are aimed at ensuring NWDT SACCOs financial stability and general stability of the financial system they operate in.
Speaking during the first stakeholders’ consultation forum in Nairobi, the Cooperatives commissioner David Obonyo said, “The non-withdrawable deposit-taking SACCOs should pay their respective share of contribution to the supervisory and regulatory oversight of the authority. The rollout of the levy will see SASRA net at least Ksh. 137.98 million from 169 non-withdrawable deposit-taking SACCOs that recently came under the authority’s regulations with deposits of Ksh. 83.62 billion. SASRA has, however, restricted the levy at a maximum of Ksh. 8 million, meaning that such SACCOs holding more than Ksh. 4.84 billion will be spared the expense.”
Speaking at the same forum, SASRA CEO Peter Njuguna had this to say, “We have done a detailed appraisal of the potential impact of the proposed levy order on the SACCOs and their members and a cost-benefit analysis. The Levy Order has been prepared based on existing government guidelines and regulations on the funding of regulatory state agencies, considering the legal underpinnings prescribed in Section 15 of the SACCO Societies Act as well as the provisions of the Interpretation and General Provisions Act. We encourage all the key stakeholders to share their feedback and opinions on the proposed Levy Order to enable us to move to the next step.”