Need for Stronger Prudential Regulation for SACCOS

TLDR

• The Cooperative Societies Act of 2013 and the Savings and Credit Cooperative Societies Regulations of 2016 established rules for licensing, lending and prudential conduct, but enforcement capacity did not always keep.
• They are neither fully fledged banks under Bank of Tanzania (BoT) prudential supervision nor informal community groups.
• Industry stakeholders broadly point to stronger prudential regulation backed by effective enforcement, professional management, computerised record-keeping, credit-reference sharing to curb multiple borrowing and.
• Larger SACCOS, by contrast, built stronger balance sheets, diversified their funding and, in some cases, secured credit lines or correspondent banking relationships, advantages smaller societies could not easily.
• Viable SACCOS also need access to refinancing facilities and technical assistance that can help them build resilience before, rather than after, a crisis.