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WOCCU-supported CU law passes in Kenya
NAIROBI, Kenya (1/28/09)--Kenyan President Mwai Kibaki has signed into law legislation to regulate and support the country’s credit unions, known as savings and credit cooperatives (SACCOs). The bill, passed by the Kenyan Parliament Nov. 14, is the result of several years of efforts by World Council of Credit Unions (WOCCU), the Kenya Union of Savings and Credit Co-operatives Ltd. (KUSCCO), WOCCU’s member organization, the Pennsylvania Credit Union Association (PCUA) and several of its member credit unions. “This is a significant step for Africa’s SACCO movement,” said Brian Branch, WOCCU’s executive vice president and chief operating officer, who helped spearhead the initiative six years ago. “SACCOs have grown quickly and are major providers in Kenya’s financial market. As such, they have come under increased popular pressure for greater levels of prudential supervision designed to protect SACCO members.” The new legislation updates frameworks for SACCO safety and soundness, and for the services they offer, enabling them to compete on more even footing with the country’s banks. The law, which stalled in the parliament for the past three years, establishes a regulatory authority for SACCOs. Kenya’s financial services industry regulations were previously lax. New provisions will establish a deposit guarantee fund, require SACCOs to meet certain liquidity requirements to remain competitive, and allow SACCOs to offer money transfers and diversify revenue sources. WOCCU continues to work to strengthen SACCO operations and create a healthier regulatory environment in Kenya, Branch said. Rising food prices and civil unrest make access to financial services for the poor even more critical. WOCCU served as an information and advocacy resource to those writing the bill. As part of those efforts, it also brought Kenyan government officials to the U.S. to meet with representatives from the National Credit Union Administration, the National Association of State Credit Union Supervisors and PCUA. Representatives from PCUA and American Heritage FCU, Philadelphia, and Service 1st FCU, Danvilla, Pa., traveled to Kenya to advocate on behalf of stronger, more credit union-appropriate legislation with Kenya’s Parliament.
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