| dc.description.abstract | In this research paper, the researcher set out to establish the international legal factors
affecting Savings and Credit Cooperative Societies (SACCOs) in Kenya. This was
meant to enhance the management of SACCOs in Kenya trough the creation of an
understanding of how international factors affect the happenings in Kenya, and in the
SACCO sector, in particular.
A questionnaire was sent to forty five Licensed SACCOs operating in Kenya, of
whom thirty one responded. Descriptive analysis indicated that international legal
factors were, by far, the greatest cause of changes in the regulatory regime in the
Kenyan SACCO sub-sector. Among the factors cited as most affected by the
regulations are capital, liquidity, governance, information technology and general
infrastructural set up of the SACCOs. The Ethics commission for cooperative
Societies and Public officer ethics (Amendments) Regulations, 2010 were not
perceived as having been influenced by international legal aspects nor were they seen
as a major challenge to SACCO operations.
The negative effects of the Changes on SACCOs include increased cost of
consultancy (88%), increased, loan loss provisioning (100%), increased cost of
licensing (93%), increased total operating costs (91%), massive shifts in customer
loyalty (79%) and reduction in dividends and honoraria payable to members. There is
also a general apathy by the movement to the government for the introduction of the
regulations. On the positive side, SACCOs consider the newly introduced regulatory
framework as being responsible for increased operational efficiency, enhanced public
confidence, and reduction in corruption in the sector. Other benefits cited included improved competitiveness in the whole financial sector as well as enhancement of
standardization and benchmarking as eventual benefits.
Most SACCOs consider staff training, product diversification, shares or funds
mobilization, aggressive cost cutting, lobbying for changes and sustained marketing to
increase membership, in that order, as necessary interventions to overcome the
challenges posed by the regulations.
The findings have regulatory policy implications and in particular the researcher
recommends urgent need for the government to addressing the disquiet in the industry
pertaining to the financing of the Sacco Societies Regulatory Authority (SASRA), the
powers wielded by the Authority over deposit taking SACCOs and the prudential
guidelines issued by the Authority. On the other hand, the movement needs to learn to
embrace change, be more accommodative and work with the government to iron out
any outstanding issues. | en |
