NAIROBI, Kenya-Seven months after passing its first credit union law, Kenya's government is working to create effective regulations with the help of World Council of Credit Unions (WOCCU).
In November 2008, Kenya became the first country to develop a law specifically designed to regulate savings and credit cooperatives (SACCOs), as credit unions are known. WOCCU hosted a two-day workshop for a committee that is now working to develop regulations, design a regulatory agency, create model bylaws and develop a deposit guarantee fund. on in the country.
Brian Branch, WOCCU EVP/COO and who helped spearhead the legislative initiative in Kenya more than six years ago, was in Nairobi to facilitate the workshop. "Kenya's SACCO system has grown at a tremendous rate in the past several years, but it has lacked any kind of regulatory oversight and supervision that would enable SACCOs to really evoke trust in their communities and to compete against banks and microfinance institutions," Branch said.
Kenya's SACCOs serve nearly 20% of the economically active population, and some large SACCOs compete head-to-head with banks, but prior legislation prohibited them from offering some of the same services. The new law puts SACCOs on more even footing with their competitors. Of 4,000 SACCOs in Kenya, just 200 accept deposits.
A significant portion of the workshop was dedicated to the design and operation of a regulatory agency, WOCCU said.
