The Sacco Societies Regulatory Authority (Sasra) must take the warning by FSD seriously.
In a new detailed report on the sector, the FSD found that the country’s savings and co-operatives societies were operating without effective accounting and control systems.
Too many Kenyans stand to lose if saccos become unstable as billions of shillings of savers’ funds are held by the institutions.
The FSD is an institution that has capacity to determine financial strength and capacity of an institution as it offers the financial sector advisory services hence its warning should not be taken lightly.
Its report is a serious indictment on the sector regulator as it questions its role in ensuring compliance with prudential guidelines and protecting savers’ money in the key sector.
It avers that most saccos are currently operating high risk models that are prone to liquidity risks.
The onus is now on Sasra to rein in the saccos by ensuring that they all operate according to the law.
It should not allow any sacco to play Russian roulette with members’ funds.
The regulator has the means to ensure that strong controls are not only instituted but also enforced to the letter.
Confidence in the saccos is very key for their survival.
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