Kenya has reopened the registration of new savings and credit cooperative organizations (SACCOs), ending a one-year suspension that was triggered by widespread governance failures across the cooperative sector.
In a statement issued on Wednesday, June 3, 2026, Commissioner for Co-operatives David Obonyo said the move was informed by the successful review of laws and regulations governing the sector, with the aim of strengthening sustainability, accountability and good governance among SACCO societies.
The suspension, which took effect in May last year, followed governance and operational challenges in several institutions, including KUSCCO, Metropolitan SACCO, and Ushuru SACCO, which exposed vulnerabilities within the sector. The KUSCCO scandal alone revealed that the apex body had been managing Sh18.9 billion in member deposits while operating deposit taking and insurance services without proper licensing, in direct violation of the Sacco Societies Act. Obonyo said a technical committee which included experts from both within and outside Kenya reviewed the legal and operational framework and has since submitted its report, paving the way for the resumption of registrations under stricter conditions.
The new registration threshold is considerably higher than before. To register, SACCOs must now have a minimum of 1,000 members, access to at least Sh1.2 million in operational capital, a physical office, at least one clerical employee, and sufficient share capital to sustain operations for at least 12 months. Financial viability is also a central condition.
“Newly registered SACCOs will be required to demonstrate the ability to mobilise at least Sh10 million within their first year of operation. We want SACCOs that can sustain themselves and protect members’ savings,” Obonyo said.
The reforms come against a backdrop of poor regulatory compliance. Kenya currently has approximately 14,000 registered SACCOs, but only about 4,000 regularly comply with the requirement to file annual returns, raising serious concerns over the operational viability of thousands of SACCOs currently on record.
“More than a significant number of these SACCOs have not filed annual returns, meaning they may not be viable,” Obonyo said.
The cooperative movement nonetheless remains central to Kenya’s economy. Daniel Marube, CEO of the Cooperative Alliance of Kenya, noted that an estimated 20 million Kenyans belong to at least one cooperative society or SACCO, with roughly 75% of the population depending directly or indirectly on cooperative activities. Speaking during launch preparations for this year’s International Day of Cooperatives, Obonyo added:
“The process was paused to allow a technical committee to review the legal framework governing SACCOs. The committee has now submitted its report, and we have resumed registration with stricter conditions.”
The reopening signals a new chapter for Kenya’s cooperative sector one where viability, will determine who gets to participate.
