Kenya's co-operatives sector has moved to quell a simmering dispute over a proposed levy by the regulator, by agreeing to cut the charges to 0.125 per cent, from 0.175 per cent of deposits.
The Sacco Societies Regulatory Authority (Sasra), through a gazette notice, had proposed to increase charges to 0.175 per cent of deposits from 0.1 per cent, and cap the maximum amount payable by a sacco annually to Ksh10 million ($96,370), from Ksh6.5 million ($62,640), effective January 2017.
But in a meeting held in Nairobi on Thursday, the Kenya Union of Savings and Credit Co-operatives (Kuscco), Co-operative Alliance of Kenya, Kenya Rural Savings and Credit Co-operatives Societies Union, Sasra and about 300 Sacco representatives countrywide also agreed to cap the maximum levy paid by each society to Ksh6.2 million ($59,749) from the proposed Ksh10 million ($96,370) annually.
They resolved that the proposed levy of 0.175 per cent be implemented after five years to allow Saccos to grow.
“Our initial position was that there should be no increment in the levy, but after consultation with the stakeholders, we have resolved that the proposed 0.175 per cent levy be attained at the end of the fifth year to give Saccos time to absorb the effects of the reduced income as a result of the interest rate capping,” said Kuscco’s chief executive, George Ototo.
Sasra acting chief executive John Mwaka did not respond to our queries.
Sacco societies have protested new levies on member deposits announced by Sasra two weeks ago, putting the sector on a collision course ahead of a meeting with President Uhuru Kenyatta next month.
Co-operative Alliance of Kenya chief executive officer Daniel Marube told a Sacco Leaders Congress in Mombasa that the levies were wrong as they were based on member’s savings rather than earnings from the business.
“We have rejected the levies and have requested a meeting with the Cabinet Secretary. The Sacco Societies Regulatory Authority and other regulators should be funded by the Treasury,” he said.
The matter is expected to come to a head at ae meeting to be mediated by state department of cooperatives principal secretary Ali Noor Ismael in two weeks.