Transcript
Joy: Welcome to SACCO Management — practical ways to run a healthier SACCO. I'm Joy, and with me is James. Today: the rules that govern your SACCO — the laws, regulations and by-laws.
James: Thanks Joy. And the honest truth is that every SACCO sits inside a framework of rules. Some come from the law and the regulator, and some the SACCO writes for itself.
Joy: So why should a busy manager really care about all this?
James: Because it protects the licence to operate. A SACCO that lets its by-laws drift, misses a reporting deadline, or lends outside its own policy risks fines, suspension, even de-registration. This is what keeps members' savings safe.
Joy: Let's start at the top. What does the law layer look like?
James: The top layer is national legislation you must follow whether you like it or not. In Tanzania, that's the Cooperative Societies Act of 2014 — it governs how a SACCO is registered, run and dissolved. Uganda and Kenya have their own equivalents.
Joy: And because a SACCO takes deposits and lends?
James: Exactly — so it also falls under microfinance law. In Tanzania that's the Microfinance Act and the SACCOS Microfinance Regulations of 2019, which set tiers, capital and prudential standards.
Joy: You keep saying "Act" and "Regulations" — what's the difference?
James: The Act gives you the broad law. The Regulations spell out the detail — the limits, the forms, the ratios and the deadlines. Both bind you equally.
Joy: Okay, so who's actually watching us?
James: Two authorities matter most. First, the Registrar of Cooperatives — the Mrajis. He registers the SACCO, holds your by-laws on record, and oversees cooperative compliance and the AGM.
Joy: And the second one?
James: The microfinance regulator or central bank. In Tanzania, the Bank of Tanzania supervises SACCOS as microfinance institutions. Uganda uses UMRA, Kenya uses SASRA. They set prudential rules and receive your returns.
Joy: Now, the by-laws — people call them the SACCO's constitution.
James: That's a good name for them. By-laws are the rules the members themselves adopt at the AGM, within what the law allows. They cover membership, shares, the board, committees, meetings and how surplus is shared — and once registered, they're legally binding.
Joy: What trips SACCOs up here?
James: Letting them go stale. When members vote to change a by-law at the AGM, that change must be lodged with the Registrar. An out-of-date registered copy is a real compliance gap.
Joy: Below the by-laws we have the policy manual. What goes in there?
James: The day-to-day rules the board approves — savings, credit, finance, cash handling and HR should each have a written policy. Review them at least once a year so they match current practice, the law, and your CAMS controls. And crucially, follow the manual in practice — lend, spend and hire by the book, every time.
Joy: Last piece — comply and report. How do we prove it?
James: By what you file and how you behave, not by good intentions. Submit audited accounts, returns and prudential reports on time to both the Registrar and the regulator. And hold your AGM on time, with elections and approved accounts — that meeting is itself a compliance duty.
Joy: Any small habit that makes all this easier?
James: Diarise every deadline, and keep one current, registered copy of your by-laws on file. Those two habits prevent most problems.
Joy: The takeaway: know which rule applies — law, regulation, by-law or policy — keep each one current, and prove your compliance by filing on time and living by your own manual. Thanks James, and thank you for listening to SACCO Management.