The Sacco Societies (Amendment) Bill 2021 was signed into law by President Uhuru Kenyatta after sailing through the National Assembly. The President’s action means that unlike before, Sacco’s will now be compelled to share information with the Credit Reference Bureaus about their customers
Being listed as a loan defaulter by the Credit Reference Bureaus (CRBs) has become a nightmare for many borrowers in Kenya; it has ruined the lives of thousands of people in the country. Once listed, it means that you are in the red and cannot access credit from any licensed commercial lending institution.
This has forced many Kenyans to resort to even more deadly loan sharks for credit which attract astronomic interest rates.
Now news that the Sacco Societies (Amendment) Bill 2021 has been signed into law has hit hundreds of thousands of the members of the country’s Savings and Credit Cooperative (Sacco) Societies. To date, CRBs have only been targeting defaulters of commercial banks and other lending entities like Safaricom’s M-Shwari where a defaulter is often referred for listing by the dreaded CRBs.
The Sacco Societies (Amendment) Bill 2021 was signed into law by President Uhuru Kenyatta after sailing through the National Assembly. The President’s action means that unlike before, Saccos will now be compelled to share information with the Credit Reference Bureaus about their customers, especially critical and confidential information that includes performing and non-performing loans.
Once our confidential information is under the CRBs, your nightmares begin as they ruthlessly pursue a defaulter through their cell phones and otherwise to recover monies owed.
Parliament backed the Bill in February this year that will compel savings and credit co-operative societies to share information with CRBs in what promised to expose hundreds of thousands of loan defaulters within the multi-trillion shillings Sacco movement. The Sacco Societies (Amendment) Bill sailed through after the second reading in Parliament before being forwarded to the President to sign into law; it will take effect before the end of the year.
The proposed law is among the 23 Bills that the High Court in 2020 declared as unconstitutional for having been passed by the National Assembly without the input of the Senate. The then Leader of Majority Amos Kimunya told the House that the republication of the Sacco Societies (Amendment) Bill was meant to comply with the court order.
Earlier a three-judge bench on October 29, 2020, ruled that the Senate’s role in legislation is not optional and that it was illegal for the National Assembly to ‘ignore’ the Senate. However, Kimunya was widely quoted telling the house: “This Bill has been republished to comply with the court order. It has gone through all processes and we should pass it before being forwarded to the Senate for input.” With that, the die was cast for the hundreds of thousands of Sacco savers across the country.
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