REGULATORY AUTHORITY AND OPERATIONAL COMPLIANCE OF SPECIFIED NON-DEPOSIT TAKING SACCOS IN NAIROBI CITY COUNTY, KENYA

Dr. Jane K Kibanga

Abstract


Savings and Credit Cooperatives (SACCOs) are important to Kenya's financial sector, promoting financial inclusion and economic empowerment through savings and affordable credit. However, recent data shows a decline in the capital adequacy and liquidity ratios of SACCOs in Nairobi City County, signaling potential financial instability. The general objective of the study was to examine the effect of regulatory authority on operational compliance of specified non-deposit taking SACCOs in Nairobi City County, Kenya. The specific objectives of the study were to examine the effect of authorization, regulation, supervision and promotion of sound business practices on operational compliance of specified non-deposit taking SACCOs in Nairobi City County, Kenya. The study adopted a systematic review of literature. The study found that authorization, regulation, supervision and promotion of sound business practices influenced operational compliance of specified non-deposit taking SACCOs in Nairobi City County, Kenya. The study concluded that regulatory authority plays a significant role on operational compliance of specified non-deposit taking SACCOs in Nairobi City County, Kenya. It recommends that SASRA should enhance its focus in streamlining the authorization process for non-deposit taking SACCOs, improve operational compliance. Timely and efficient processing of authorization requests is important for providing SACCOs with clear regulatory guidance. SASRA should regularly assess approval rates to identify challenges and make timely adjustments to regulatory standards. Continuous monitoring of adherence to authorization standards would ensure effective compliance and financial management. Regulators should emphasize the effective implementation of regulations to uphold high standards in disclosure, capital adequacy, and liquidity. Increased supervisory efforts, with frequent inspections, could identify problems early for prompt resolution. Prioritizing sound business practices, including governance, risk management, and internal controls, would further enhance compliance and stability within SACCOs.

Keywords: Regulatory Authority, Operational Compliance, Non-deposit Taking SACCOs


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References


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