Mismanagement in Kenya’s Savings and Credit Cooperatives (SACCOs) have been brought in the limelight as management and board collude to breaks rules, and embezzle funds without care.
It is for the above reason that the successful formation of the Sacco Fraud Investigation Unit to police the sector that has been marred by fraudulent deals and embezzlement is welcome and timely.
Agriculture Cabinet Secretary Peter Munya said the unit, which is under Sacco Societies Regulatory Authority (Sasra), has so far finalised an investigation, caused an arrest and prosecution of a case where Sh1.3 million had been embezzled by a suspect has so far been recovered.
President Uhuru Kenyatta in 2019 directed State Department of Cooperative, which is under Mr Munya, to form an investigative fraud unit.
“I am happy to report that the Fraud Unit has been established and fully operational. The unit is staffed by specialised officers seconded from the Directorate of Criminal Investigations and is functionally supported by Sasra’s technical staff,” said Mr Munya.
Mr Munya said that more investigations are underway and that the fraud unit has been able to disrupt the operations of a pyramid scheme-like entity, which was defrauding the public of their savings by falsely posing as a sacco.
“Fraudsters and fraudulent schemes normally styled as saccos are therefore put on notice that the government will soon catch up with them,” warned the CS.
He cautioned members of the public from dealing with unregulated and unsupervised entities and advised them to undertake due diligence on any entity purporting to be a sacco before saving with them.
Non-deposit taking saccos currently holding members’ deposits amounting to Sh100 million and above will now be regulated by Sasra under new regulations aimed at streamlining the sector.
This follows the publication of the Sacco Societies (Non-Deposit Taking Business) Regulations, 2020, which took effect on January 1, 2021.
Sasra chairman John Munuve said the non-deposit taking saccos are expected to comply by applying to the authority within six months of the Regulations 2020 for authorisation to operate.
He said bringing these Saccos under the regulatory oversight of Sasra will extend the benefits of regulated savings and loan services to more Kenyans, while improving the stability and resilience of the sub-sector.
Kenyan Business Feed is the top Kenyan Business Blog. We share news from Kenya and across the region. To contact us with any alert, please email us to [email protected]