My SACCO Board Made a Decision I Disagree With. What Can I Actually Do?

If you disagree with a SACCO board decision, such as a refused loan, a restricted withdrawal, a change in dividend policy or the termination of your membership, the route is the Co-operative Tribunal. It is not the ordinary courts, and it is not SASRA. Section 76 of the Co-operative Societies Act says disputes between a member and the society, its Committee or any of its officers shall be referred to the Tribunal, and an order of the Tribunal can be appealed to the High Court within 30 days. Before you file anything, read the SACCO’s bylaws and ask for the minute that records the decision, because most of these disputes are won or lost on what the bylaws say.

Where a SACCO board decision gets challenged

Section 76(1) of the Co-operative Societies Act covers disputes concerning the business of a co-operative society that arise among members, between members and the society, its Committee or any officer, or between societies. It says they “shall be referred to the Tribunal”. For a deposit-taking SACCO, the Sacco Societies Act says the same thing in section 67(3), which provides that all disputes arising out of Sacco business under that Act shall be referred to the Tribunal.

One point of vocabulary helps. The Co-operative Societies Act does not use the word “board”. Section 28 gives every co-operative society a Committee of not less than five and not more than nine members, and section 28(3) makes it the governing body, acting subject to any direction from a general meeting and to the society’s bylaws. A SACCO board decision is therefore a Committee decision in the statute, open to challenge to the extent it breaks the Act or the bylaws.

Why SASRA is usually not the answer to your own complaint

The Sacco Societies Regulatory Authority has a different job. Section 5 of the Sacco Societies Act lists its functions as licensing Sacco societies to carry on deposit-taking business, regulating and supervising them. Section 49 lets it inspect a Sacco society and its books, and section 50 lets it give advice and issue directions where it believes the business is being conducted contrary to the Act or in a way detrimental to the best interest of members. That makes SASRA a useful recipient of a complaint about a pattern of conduct. The provisions I read do not give it a function of deciding your individual claim, and its supervision under section 48 covers deposit-taking SACCOs only.

What the law gives you as a member

Section 21 of the Co-operative Societies Act sets out your rights. A member may:

• attend, take part in and vote at general meetings;
• be elected to the organs of the society, subject to its bylaws;
• use the society’s facilities and services, subject to its bylaws; and
• obtain all legitimate information about the society at its head office, including internal regulations, registers, minutes of general meetings, supervisory committee reports, annual accounts, inventories and investigation reports.

Section 22 sets the other side of the bargain. A member must observe the bylaws and the decisions of the society’s organs taken in accordance with them. The Act also makes the general meeting the supreme authority of a co-operative society (section 27(1)), and section 47 of the Sacco Societies Act says the annual general meeting is the supreme organ of a Sacco society. Section 27(2) requires an annual general meeting within four months after the end of each financial year. Where members can overturn the decision, the general meeting is a legitimate place to raise it.

Check the bylaws before any SACCO board decision goes to the Tribunal

A Tribunal will read the Committee’s decision against the bylaws, so you should too. The Tribunal’s judgment in Bobby v Kipkaren Sacco Limited & another [2023] KECPT 1096 (KLR), delivered on 30 November 2023, shows how that works in practice, and it did not go the way many members would expect.

The claimant, a former chairman, challenged how his membership status was determined. The Tribunal first held that a dispute between a member or past member and his society was properly before it under the Act. It then applied the SACCO’s own bylaws. Membership required, among other things, that the member own a PSV vehicle operating on the named routes. The claimant’s vehicle had been impounded by a bank, he had given up the chairmanship in 2017 and he had stopped taking part in the SACCO’s activities. The Tribunal found that he was the author of the end of his membership. Although the record did not show he had first been suspended as one bylaw provided, the Tribunal held that a member who loses the common bond loses the qualification for membership, so the Committee was in order to terminate it. The claim was dismissed with costs.

How a Tribunal dispute runs

You file a claim with the Co-operative Tribunal identifying the decision, the date, the bylaw or section said to be breached and the order you want. The Act gives the Tribunal power to make orders and to take evidence on oath (section 79). Either side may appeal to the High Court within 30 days of the order, and the Act allows that period to be extended (section 81).

Section 76 does not list an internal appeal as a condition of filing, but most bylaws provide one. A practical order of steps is:

• request in writing the bylaw, resolution and Committee minute on which the decision rests, citing your section 21 right to information;
• compare the decision against the bylaws, noting any notice, hearing or voting requirement the Committee skipped;
• use the internal complaints or appeal step if the bylaws provide one, and keep copies of everything;
• consider raising the matter at the general meeting if members can overturn the decision; and
• file with the Tribunal promptly once the internal route is exhausted or clearly futile.