Cooperatives and Micro, Small and Medium Enterprises (MSMEs) Development Cabinet Secretary (CS) Wycliffe Oparanya has addressed the need for stronger regulatory frameworks to ensure Savings and Credit Cooperative Organisations (SACCOs) operate transparently and efficiently.
This comes in the wake of incidents where SACCOs in Kenya have been collapsing while others have been reported to have swindled Kenyans.
“There is a need for stronger regulatory frameworks to ensure SACCOs operate transparently and efficiently. This includes stricter adherence to financial management standards and regular audits to safeguard members’ interests,” Oparanya said in a statement.
He further elaborated on ways in which SACCOs can manage to stay afloat.
“For increased investment in SACCOs to boost their capacity and sustainability, there is a need for investment promotion. This includes encouraging both private and public sector investments to enhance SACCOs’ ability to provide better financial services,” Oparanya stated.
The Cooperative CS also urged the SACCOs to embrace capacity-building programs so as to improve their financial literacy and operational effectiveness.
Also read: CS Chelugui Disbands Sacco Board of Directors, Here’s Why
SACCOs hit with alleged financial mistrust
Ekeza Sacco is among SACCOs hit with financial mistrust in the past leading to its closure.
The Sacco’s troubles began in 2019 when it was alleged that its founder David Kariuki Ngare alias ‘Galkayo’ embezzled its contributions and as a result, it affected 78,000 members.
It is reported that Gakuyo illegally transferred an estimated amount of Ksh1.5 billion from the Ekeza Sacco to a sister company, Gakuyo Real Estate without his member’s consent.
According to an audit report conducted by the Commissioner of Cooperatives, the money was illegally transferred between 2015 and 2017.
As such he was arrested as he was allegedly trying to flee from the country and arraigned at Milimani Law Courts on February 22, 2024, for questioning.
Following public outcry, Ekeza Sacco was deregistered, and its license revoked in March 2018 for violating its operation rules as well as failing to comply with the law.
Metropolitan SACCO
Metropolitan SACCO is the latest Sacco to be hit with a financial scandal.
It is reported that over 100,000 members of Metropolitan National Sacco Limited had been hit hard after reports emerged that the finance institution had lost an estimated amount of Ksh15 billion between 2021 and 2023.
The Metropolitan National SACCO interim chairperson blamed the former regime which reportedly failed to account for the expenditure and the whereabouts of the members’ savings.
Also read: Controversial Bishop Gakuyo Arrested at JKIA
An audit earlier this year revealed that a staggering Ksh12 billion was stolen or embezzled from a savings and credit cooperative society (SACCO) through a sophisticated scheme involving both former and current senior staff, as well as board members.
The scandal came to light three years ago after several complaints from members about their inability to access funds. The frustration of members, who were blocked from withdrawing their money, led to a demand for a deeper investigation.
On August 15, the SACCO’s interim board met and urged government agencies, including the Directorate of Criminal Investigations (DCI), to speed up their investigation and recover as much of the stolen money as possible.
The Kenya Police Sacco
The Kenya Police SACCO has also allegedly had issues with claims of financial mismanagement.
It is reported that a section of members expressed skepticism about the SACCO leadership and therefore called for the resignation of some of its leaders including the Board of Directors (BOD) and the Chief Executive Officer.
However, in an interview conducted by The Standard, The CEO, Solomon Angutsa issued a rejoinder by dismissing the allegations as untrue, baseless, and not reflective of the principles that guided the SACCOs operations.
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