A State-appointed team has opposed trading of sacco shares between members or on the National Securities Exchange(NSE), warning that the practice compromises the spirit of member ownership and long-term participation.
This comes on the back of a push from the NSE for the listing of the saccos on the stock market to boost trading activity and unlock millions of dollars of share capital forfeited by former sacco members on the grounds that they are non-refundable and can only be transferred to an existing member.
NSE officials had said in November 2025 that discussions were ongoing with key stakeholders, including government policy makers, regulators, sacco leadership, and members, to start trading sacco shares on the bourse.
This move, NSE officials argued, would give former sacco members and those intending to terminate their membership an opportunity to sell their stake in an open market and at a competitive price determined by market forces of supply and demand.
Cooperatives and Micro, Small and Medium Enterprises Cabinet Secretary Wycliffe Oparanya.
Photo credit: Fiie| Nation Media Group
The focus team appointed by the Cabinet Secretary, Ministry of Co-operatives and MSMEs Development, Wycliffe Oparanya, however, said that the practice of trading sacco shares between members or on the NSE deviates from the co-operative principle of member ownership and long-term participation.
The committee pointed out that globally, credit union shares are nominal, typically nontransferable, and redeemable only by the institution.”
“Trading on the NSE is expected to bring about confusion for members and is not likely to be in their best interests due to costs incurred to trade or poor trading conditions.
However, given the scale of “locked in” savings in the Kenyan Sacco system currently, it is important that members who have share capital, which they cannot access, should have a vehicle to “trade” those shares, the committee said.
This committee, which is chaired by Marlene Shiels, who is also the CEO of UK-based Capital Credit Union, said any vehicle created to trade sacco shares, whether on the NSE, should ensure that members’ interests are paramount.
Sacco shares, or share capital, function as the core equity capital of the institution, representing ownership rather than a liquid savings account.
Share capital is considered permanent equity and generally not withdrawable while a member is active in the sacco. But even if a member opted to exit a sacco, they cannot simply withdraw the amount. Instead, they must transfer it to another willing member or back to the sacco, if allowed.
The team said that heavy reliance on member share capital to meet core capital requirements can create liquidity constraints and limit institutional flexibility.
"Internationally, credit unions diversify their capital base through retained earnings, reserves, and institutional capital," it said.
Ms Shiels' committee was tasked to: review the legislative and regulatory framework, propose reforms to strengthen deposit protection and liquidity management, develop pathways for harmonisation of oversight across all Saccos, and benchmark Kenya’s system against global best practices.
