Kenyans Warned Against Pyramids in the Name of Saccos

The Saccos and Societies Regulatory Authority (SASRA) has raised an alarm over the rising number of unregistered entities posing as Saccos.

In a statement on Monday, December 18, SASRA warned that many people and institutions were still carrying out businesses that should be under regulated SACCO business without the requisite authorization. 

As per the notice, sacco business could be in the form of specified non-deposit taking business popularly known as BOSA whose non withdrawable assets and liabilities are equal or in excess of Ksh100 million.

BOSA refers to an entity that offers various loan products to its members, such as development, school fees, emergency and dividend business.

In addition, sacco business could also refer to BOSA entities whose members are principally drawn from persons in the diaspora. 

According to SASRA, the trend has often resulted in loss of funds by members of the public.

The statement explained that unsuspecting people are usually left without any way of recovering the money whenever such unauthorized institutions fail to meet their financial obligations. 

“These incidences have often resulted in and/or occasioned the loss funds by members of the public without any recourse, whenever such unauthorized institutions fail to meet their financial obligations,” the notice read in part. 

As such, the regulator warned all members of the public and public and private sector employer-institutions against undertaking Regulated SACCO business with unauthorized entities.

Also Read: Inflation Led to Sacco Borrowing Rise by 9%, SASRA Report shows

SASRA advice to employers on saccos remittances

In the statement, SASRA emphasized that undertaking any business with such an illegal Regulated SACCO business whether styled as a SACCO or not shall be at the persons’ risk and peril.

Additionally, the SACCO regulatory body advised all the members of the public to always exercise caution and undertake the requisite due diligence before placing or authorizing the placement of their funds or moneys.

Further, the body urged public and private sector employers to stop facilitating unauthorized entities to undertake illegal Regulated SACCO businesses through deductions and remittances.

Also Read: Government through SASRA Releases Revised List of Licensed Saccos

SASRA is the government’s principal agency responsible for licensing and authorizing SACCO Societies to undertake deposit taking SACCO businesses or specified non-deposit taking SACCO businesses respectively.

Whilst a big number of Kenyans prefers saving through SACCOs, miscreants and rogue groups have in the past capitalized on loopholes to defraud unsuspecting members of their money.