How Senate’s Bitter feud with the National Assembly is standing in the way of New Cooperatives Bill

The Bill was passed by the National Assembly with amendments on December 3, 2024, but was struck at the Senate after it underwent the first, second, and final readings on November 12 last year. The Senate then passed the Bill with amendments and referred the document back to the National Assembly for consideration on February 12th 2025.

By law, the two houses must agree on the amendments before the Bill is sent to the President.
According to those familiar with the issue, the delay in the National Cooperative Bill could be due to governance clauses and devolved functions between the National Assembly and the Senate.

Others believe that the industry’s vast resources appear to have attracted strong vested interests, all keen to control or delay the process.

According to the Senate Bill tracker, this draft, which was published two years ago, was passed by the Senate with amendments and referred to the National Assembly for consideration.  However, the National Assembly rejected these Senate amendments on Tuesday, 14th April, 2026. The Bill has thus been referred to a Mediation Committee.

“There is a lot of goodwill from the co-operatives sector about the need for legal and regulatory reforms. At present, we have numerous forums that are disseminating information, most of which are not well-researched, doing the rounds. This industry is huge, with a lot of resources, and therefore attracting the attention of vested interests and groups,” said CPA Joyce Waceke Ndegwa, Mentor SACCO Chief Executive Officer.

She adds that for the Bill to become law, what is needed is wider public participation and a lot of understanding and harmony in the industry, as well as consultations.

As 2026 draws to a close, and with no inter-SACCO lending facility in place following troubles at Kenya Union of Savings and Credit Cooperatives (KUSCCO), financial cooperatives are still locked out of the National Payments System.

“Inter-SACCO lending is a long overdue issue. But once structures are put in place and a central pool identified, SACCOs will be able to access the facility that offers loans at lower rates than what banks are offering and hence make more profits,” said Isedorius Agolla, Chairman of Kenya Association of Front Office Service Activity (KAFOSA), Coast Region.

The New Cooperatives Bill, if enacted into law, seeks to establish a Deposit Guarantee Fund to compensate members in the event that a financially troubled SACCO goes under and is liquidated.

“The New Cooperatives Bill that is coming up seeks to address some of the legal challenges and regulatory gaps that allowed losses to occur, as in the case of KUSCCO, which took place over a long period of time without anyone noticing or taking any action.  We need a regulatory framework to govern the operations of Secondary Cooperative Societies such as KUSCCO,” said Mrs. Ndegwa.

She added that the Cooperative is currently enjoying goodwill from the Government.

“The new bill will repeal the current Cooperatives Act Cap 490, enabling SACCOs to enter the National Payments System, for instance. This has enormous benefits for SACCOs in terms of service delivery to members, such as clearing of cheques without going through a bank,” she said.

Available data shows that all Cooperative Societies, including SACCOs as well as Housing, Coffee, Dairy and Others, hold over KSh 1.5 trillion in deposits and assets.

While a sessional paper drawn to trigger a repeal of the outdated Cooperatives Act, Cap 490, has already been published, the document is still stuck in Parliament awaiting debate and approval.