The government has imposed a three-month freeze on the registration of new Savings and Credit Cooperatives (SACCOs), a move aimed at cleansing the sector of unregulated and dubious entities while paving the way for sweeping reforms.

Cooperatives Cabinet Secretary Wycliffe Oparanya made the announcement on Wednesday during the formal installation of a new Transition Board of Directors for the Kenya Union of Savings and Credit Co-operatives (KUSCCO), declaring that the suspension would provide the necessary breathing space for an expert review of the industry’s governance frameworks and legal standing.

“We have suspended the registration of new SACCOs for three months. The suspension will allow a committee of experts to finalise its review of governance and policy alignment,” the CS stated.

Oparanya underscored the urgency of the decision, pointing to a growing concern over the proliferation of so-called “briefcase SACCOs” — shadowy operations that often elude regulation and pose significant risks to members’ savings and public trust.

He said the pause in registrations would act as a safeguard to “restore order and ensure only credible cooperatives operate within the legal framework,” with the ultimate aim of fortifying the cooperative movement’s integrity.

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As part of the reform agenda, the Ministry also unveiled a five-member committee of experts charged with reviewing the SACCO Societies Act, 2008.

Their remit includes drafting proposals for policy and institutional changes that reflect current sector dynamics and are benchmarked against global standards.

Alongside the legislative review, the Ministry presided over the swearing-in of KUSCCO’s new board, which is expected to hold office for two years following their appointment by the Commissioner for Cooperatives.

“The Ministry has also presided over the inauguration of the new Transition Board of Directors of the Kuscco for a two-year term, following appointment by the Commissioner for Cooperatives,” he said.

Oparanya expressed optimism that the combined efforts of the appointed committee and the fresh KUSCCO leadership would deliver results that strengthen the resilience of SACCOs, tighten accountability, and steer the sector into a more sustainable and transparent future.

The latest developments reflect a sharpened focus by the government on professionalising Kenya’s cooperative space — an industry widely recognised for its role in expanding financial access and bolstering grassroots economic empowerment.