Carrying out of deposit-taking business
No person shall carry out deposit-taking business within the meaning of this Act, unless such person—
(a) is a Sacco society registered under the Co-operative Societies Act of 1997
(b) holds a valid licence issued under this Act.
A person who contravenes the provisions of this section commits an offence and shall be liable, on conviction, to a fine not exceeding five hundred thousand shillings, or to imprisonment for a term not exceeding three years, or to both such fine and imprisonment.
The Cabinet Secretary may, in consultation with the Authority, make regulations providing for the licensing and supervision of co-operative societies carrying out deposit taking business in compliance with Islamic law.
Application for license
A Sacco society intending to transact the deposit-taking business in Kenya shall, before commencing such business, apply in writing, to the Authority for a licence, in the prescribed form.
(2) An application under subsecti(a) a copy of the certificate of registration and the by-laws of the Sacco society;
(b) evidence that the Sacco society meets the minimum capital requirements prescribed in the Second Schedule;
(c) information relating to the place of business, indicating that of the head office, and branches, if any;
(d) the prescribed fees;
(e) a report by the Sacco society, covering the following—
(i) objectives of the deposit-taking Sacco society business;
(ii) membership and share capital;
(iii) economic and financial environment;
(iv) organisational structure and management; and
(v) financial and risk analysis;
(f) such other requirements as the Authority may prescribe.
A Sacco society may appeal to the Minister in reference to refusal to grant a licence within thirty days after receipt of notification of refusal.
The Minister may reverse the decision of the Authority only if—
(a) the Authority failed to follow required procedures in making its decision;
(b) the Authority’s decision was contrary to the Act and the regulations;
(c) there was no factual basis for the Authority’s decision; or
(d) based on a review of the record the Authority committed a manifest error in its assessment of facts, or abused its discretion in taking its decision.
The Authority shall, in consultation with the Minister make regulations providing for further requirements to be fulfilled before the grant of licence to a Sacco society.
Issuance of licence
The Authority shall consider every application made under section 24 and may, if satisfied that the applicant meets the requirements of this Act, grant a licence to the applicant upon payment of the prescribed fee.
The Authority shall upon the payment by the applicant of the prescribed fee, issue a licence to a Sacco society to carry out deposit-taking Sacco society business.
The licence referred to in subsection (2) shall, where the other requirements of this section are fulfilled, be issued within fourteen days from the date of payment of the prescribed fee.
Every Sacco society shall be required to pay an annual licence fee of such amount and within such time as may be prescribed by the Authority.
A Sacco society which fails to pay the annual fee by the date on which such payment is due shall in addition to any action by the Authority under section 27 be liable to pay such penalty as the Authority may prescribe.
The Authority may grant or refuse an application made under subsection and its decision shall be final.
Conditions of a license
The Authority shall endorse on a licence granted under this Act such conditions as it considers necessary and may from time to time add, vary or substitute such conditions as it deems appropriate.
Where it appears to the Authority that there are reasonable grounds for the revocation of a licence, but that the circumstances are such as that the revocation would not be expedient or would be unjust to the members, the Authority may restrict the licence in accordance with subsection (3).
A licence may be restricted by imposing
(a) a limit on the duration of the licence for a period, not exceeding one year; or
(b) such additional conditions for the protection of depositors as the Authority may deem necessary.
Revocation of licence
The Authority may, by notice in writing to a Sacco society, revoke the licence if the Sacco society—
(a) ceases to carry on deposit-taking business in Kenya or goes into liquidation or is wound up or is otherwise dissolved or deregistered under the Co-operative Societies Act, 1997 (No. 12 of 1997);
(b) fails to comply with this Act, or any rules, regulations, orders or directions issued under the Act or any condition of the licence;
(c) fails to pay the annual licence fee as required under section 25(3);
(d) does not hold at least fifty percent of the capital requirements prescribed in section 30 and the Second Schedule; or
(e) has knowingly engaged in serious criminal or fraudulent acts that are likely to cause insolvency, substantial dissipation of assets or earnings or may otherwise weaken the deposit-taking Sacco society’s condition or seriously prejudice the interests of the deposit-taking Sacco society’s members.
The Authority shall, before revoking a licence, give to the Sacco society not less than fourteen days’ notice in writing of its intention, and shall consider any representations made to it in writing by the Sacco society within that period before revoking the licence.
The Authority shall cause the name of every Sacco society whose licence is revoked under this section to be published forthwith in the Gazette and at least one newspaper of national circulation.
Where the licence of a Sacco society is revoked or cancelled, the Sacco society shall not be entitled to any refund of the licence fee in respect of any unexpired period of the licence.
An aggrieved Sacco society may appeal to the Minister in respect of a revocation of its licence within thirty days after being notified of the revocation.
An appeal shall not have the effect of suspending the actions of the Authority while the appeal is being pursued.
The Tribunal may reverse the decision of the Authority only if
(a) the Authority failed to follow required procedures in making its decision;
(b) the Authority’s decision was contrary to this Act and the regulations;
(c) there was no factual basis for the Authority’s decision; or
(d) based on a review of the record, the Authority committed a manifest error in its assessment of facts, or abused its discretion in taking its decision.
Publication of Sacco societies
The Authority shall cause the list of all Sacco societies to be published once every year in the Gazette and at least in one newspaper of national circulation.
