Audit Saccos to weed out fraudsters

Just how many Savings and Co-operative Credit Society (Saccos) are out there is one question the government ought to have a clear answer on. How many are collecting money from unsuspecting Kenyans including using online platforms to lure contributions with a promise to lend even larger sums under the Sacco model?

How many are collecting money and promising members they will earn homes, buy land and even grow to become a bank? The government’s laissez-faireattitude towards Saccos has to change because we are talking billions of shillings at stake. Last year the Central Bank of Kenya warned lenders and other financial institutions against opening accounts for dubious pyramid scheme businesses operating as saccos.

CBK, in a circular, urged banks to ensure they scrutinise transactions where non-deposit taking saccos mobilise huge sums from unsuspecting Kenyans. This is not enough, the government has to be proactive and conduct an actual audit to identify and root out these unscrupulous associations. The regulator, Saccos Sector Regulatory Authority (Sasra), currently only checks the books of 176 saccos out of thousands registered under the Cooperative Ministry. Even so, industry players say that out of 5,000 financial saccos registered with the Ministry of Industry, Trade and Cooperatives, only 2,000 are actually submitting returns.

Apart from tightening supervision over Saccos, the government also needs to reassess its tax policy not to kill the Sacco spirit which is the most effective way of getting Kenyans who have a terrible savings culture to put something away for future rainy days.