The government has embarked on a major audit on the accounts of cooperative societies suspected to be engaged in fraudulent activities.
The move comes after Agriculture, Fisheries and Cooperative Cabinet Secretary Peter Munya sanctioned the SACCO’s Fraud Investigations Unit to fast-track investigations relating to fraud, embezzlement and other malpractices in the subsector.
He warned that stern actions would be taken against persons or SACCOs, which for selfish personal gain; choose the treacherous paths to operate outside law.
Munya gave the directive in Nairobi when he issued Authorization Certification to twenty-five (25) Non-Withdrawable Deposit-Taking SACCOs commonly known as BOSA compliant with the SACCO society Act and the SACCO regulations 2020.
“I am also calling upon Sacco Societies Regulatory Authority (SASRA) to henceforth keep and maintain a very robust vigilance in the market to ensure that there is no SACCO operating outside the regulatory framework, and those that do so, must be made to face the full consequences of the law”, he said.
The CS has further appealed to members of the public to cease from undertaking SACCO business with unregulated entities.
“If you are a member of a SACCO, and your SACCO is not regulated by SASRA, you must ask why. If the answer is not satisfactory, just DO NOT put your money there”, he reiterated.
Munya noted that whereas the government was going to do its part in providing prudential oversight, members of the public must equally do their part in exercising utmost due diligence before transacting with any entity purporting to be a SACCO.
The 25 SACCOs issued with authorization certificate are now fully compliant with the Sacco Societies Act 2008 and will now be under the supervision of SASRA
He said the certification marked an important milestone in the implementation of legal and policy reforms in the SACCO subsector and urged stakeholders to follow suit.
Munya however warned those who had attained compliance, saying accomplishing that is one thing but maintaining that compliance is a totally different thing altogether.
picture by Wangare Ndirangu
“The prudential legal framework provided in the Sacco Societies Act and the Regulations, 2020 are only meant to ensure that the savings and deposits collected from the public are not only protected but also secured at all times”, he said.
The CS urged the first fully compliant SACCOs to always adhere to the legal prescriptions.
SASRA Chairman Mr John Munuve disclosed that the 157 applications received are spread across 16 counties with Nairobi taking the lion’s share at 125. Kiambu county took the second position with 9, Mombasa 7, Machakos 3, Siaya 2 while the remaining SACCOs are each from 11 Counties.
Out of the 157 applications received by SASRA , four (4) of them applied under the Diaspora SACCOs category, One (1) applied under the Digital / Virtual SACCOs category and the remaining 152 of the SACCOs applied under the category of those with deposits equal to or in excess of one hundred million shillings.
The Authority has 90 days as defined in the Regulations starting 1st July 2021 to assess and decide on the remaining 132 SACCOs awaiting authorisation.
Speaking on the side-lines of the event, Cooperative Alliance of Kenya (CAK) CEO Daniel Marube supported the CS for initiating the audit clean up saying there was need to sanitize the sub sector off the fraudsters using the SACCOs platform to perpetuate mass rip off like the infamous pyramid scheme.
“We can secure the movement from these kinds of people and if anyone is found defrauding the public in the name of SACCOs, they should be jailed and their property forfeited”, he said.
Marube noted that today’s event is a great manifestation that the cooperative sector more so the financial subs sector is growing.
“We are determined to make the cooperative movement better and the leadership is committed to achieve the standards. These regulations are meant to give confidence to the members because it gives prudential guidelines on how we can manage the resources of our members better”, Marube said.
By Wangari Ndirangu
