---
description: >-
  The law provides for registration of Cooperative societies, which are then
  later licensed as SACCOs and which provide part of loan financing for housing.
---

# 12.	Cooperative Societies Act, No. 12 of 1997

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Quick Link: [https://new.kenyalaw.org/akn/ke/act/1997/12/eng@2023-12-11](https://new.kenyalaw.org/akn/ke/act/1997/12/eng@2023-12-11)

&#x20;   This statute is important given that all Sacco societies are first registered as cooperative societies, and then apply to SASRA for a licence to operate a Sacco. Accordingly, Sacco societies are also regulated under the Cooperative Societies Act and specifically are under the Commissioner of Cooperatives who supervises their activities.

·         Section 67 of the Sacco Societies Act provides that the Cooperative Societies Act 1997 apply to deposit-taking Sacco society with respect to any matter except where such a matter is provided for in the Sacco Societies Act 2008. Section 4 provides for principles guiding the establishment of cooperative societies while section 5 of the Act provides for essentials for registration.

·         Sections 43 and 44 respectively restrict the giving of loans and borrowing monies from non-members except after a resolution by members and allowance by the society’s by-laws.

·         Cooperative societies help mobilize capital for prospective home purchases in a market where mortgages from commercial banks represent only a tiny fraction of total funding.

·         However, the powers vested in the office of the Commissioner for Cooperative Development appear excessive with the potential of slowing the growth of cooperatives and interfering with cooperative societies’ principles on ‘‘autonomy and independence’’, democracy of cooperatives and democratic control of cooperatives by their members.

·         Further, the Act is yet to be reviewed to conform to the Constitution of Kenya 2010 which devolved some functions such as regulation of cooperatives to the county governments.
