Need to rid saccos of rot, protect members’ savings
What you need to know:
- The few rotten apples undermine the spirit of saccos, which are an integral part of the government’s economic strategy to boost income-generating opportunities for Kenyans.
- Saccos offer better interest rates than commercial banks and ease members’ access to credit.
- The loans come in handy for school fees and investments such as buying land, a home or shares.
Savings and credit co-operative societies (saccos) are key drivers of the savings culture in the country, boosting members’ well-being and economic development.
In rural areas, they are a reliable source of funds for agricultural projects. But they are also active in the urban centres in several sectors, including public transport and housing.
Saccos have, over the years, made tremendous contributions to national development through economic growth and poverty alleviation.
They are credited with constructing nine out of 10 housing units for lower-income Kenyans.
By 2017, there were 22,000 saccos, with more than 14 million members, contributing more than 40 per cent of the gross domestic product. Official data show at least one Kenyan directly or indirectly derives a livelihood from a sacco.
There are some 15 or so saccos that have been feted for efficiency. But some have been found to mismanage members’ savings, benefiting crooked officials and managers.
They include Metropolitan Sacco Limited, whose board has been replaced following an audit that exposed shocking rot.
A caretaker committee has taken charge amid investigations into massive irregularities, such as fictitious dividend payments, manipulation of books of accounts and irregular lending.
The few rotten apples undermine the spirit of saccos, which are an integral part of the government’s economic strategy to boost income-generating opportunities for Kenyans.
Saccos offer better interest rates than commercial banks and ease members’ access to credit. The loans come in handy for school fees and investments such as buying land, a home or shares.
The Sacco Societies Regulatory Authority (Sasra) and the Directorate of Criminal Investigations are handling the Metropolitan case.
Some 372 complaints have been filed against officials and action taken.
The most common are abuse of office, embezzlement, bribery, breach of trust and tax evasion.
President William Ruto’s call to Kenyans to save more will end up a loner’s cry in the wilderness if saccos are mismanaged.
