Specific Licensing Requirements for Saccos
The Act (Section 24) and Regulations (Section 4) detail the information required for licensing. The following is a non-exhaustive list of the major requirements:
- Capital: SACCOs have to provide a minimum core capital of Kshs 10 million as shown in their financial or through submission of bank statements. All SACCOs have to comply with three capital adequacy ratios as stipulated in the Regulations.
- Fit and proper test: Both directors and senior management (or departmental heads) will be subject to a “fit and proper” test, vetting their moral and professional suitability to be on the board and to manage the SACCO society, respectively.
- Business plan: A detailed four-year business plan and feasibility study including projected financial statements is required.
All these requirements only apply to SACCOs conducting deposit-taking business or intending to start a FOSA.
The Main Licensing Steps for Saccos
Acquiring a licence will follow through a five-stage process sequenced as follows:
- The SACCO will submit to SASRA, the licence application forms to be found in the First Schedule of the Regulations and the required accompanying documents;
- If satisfied, SASRA will issue a Letter of Intent, upon which the SACCO will be required to set up its business premises, put in place a management information system (MIS), and develop a comprehensive isk management framework;
- Once the SACCO has completed (2) above, SASRA will then conduct an on-site inspection within 30 days, and;
- If satisfied, SASRA will issue a Letter of Compliance to the SACCO within another 30 days;
- SASRA will then issue a licence upon payment of the licensing fee of KShs 50,000 for a head office and KShs 20,000 for every branch held.
SASRA estimates that it will take an average of four (4) months for a SACCO that fully complies with all the licensing requirements to be issued with a licence.
Note: The licence to conduct deposit-taking business will be renewed annually.