State bets on unit to tame Saccos fraud
Industry,Trade and Co-operatives Cabinet Secretary Peter Munya yesterday expressed confidence the new Sacco Societies Fraud Investigation Unit (SSFIU) will combat theft and mismanagement in the multi-billion-shilling sector.
He said the government had embarked on serious policy interventions to seal loopholes, ensure sustainability and enhance the sector’s contributions to economic growth.
The unit, domiciled in the Sacco Societies Regulatory Authority (SASRA), is part of the government’s policy interventions to spur growth of the sector, Munya added.
Munya was addressing the 20th Africa Sacco Associations congress in Mombasa.
He said SSFIU is expected to crack down on rogue managers accused of stealing billions of shillings in deposits from thousands of members across the country.
He also acknowledged Saccos’ roles in achievement of the Big Four agenda of food security, affordable housing, universal health care, manufacturing and job creation.
Vibrant sector
“We are keen to ensure sanity in the sector and the ministry of Trade and Industry is working round the clock to align policies with the Constitution to ensure sustainability and growth of the vibrant sector,” said Munya.
In addition, he said, the ministry has signed a memorandum of understanding with the Ethics and Anti-Corruption Commission (EACC) to deal with irregular practices afflicting the sector.
“Issues of irregularities in the Sacco sector will be no more. We have signed an MOU to address all governance challenges to ensure consumer protection is prioritised,” the CS said.
Munya said his ministry had approved the National Co-operatives Policy, SSFIU, the coffee sub-sector reforms, revival of cotton co-operatives and Kenya Planters Co-operative Union.
He said Saccos were reeling under the weight of mismanagement, fraud and bad loans and that failure by employers to remit deductions was increasingly becoming a big threat to their survival.
Among the challenges Saccos face include failure to meet and maintain prudent standards, especially the liquidity ratio and capital adequacy ratio, liquidity constraints, making it impossible to issue new loans.
This plunged them deeper into loss making territory, thus the neee for immediate interventions, especially at policy level.
National savings
The sector is significant as directly and indirectly, co-operatives account for 45 per cent of the gross domestic product and 30 per cent of national savings and deposits.
Kenya has more than 24,000 registered co-operatives.
Majority of deposit-taking Saccos in the country are experiencing financial instability due to failure by State agencies and private companies to remit statutory deductions on time.
Kenya’s Sacco movement is ranked the best in Africa and seventh best globally, with an asset base of more than Sh1 trillion becoming among the most economic promising sector.
