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Saccos sag under Sh4b unpaid dues

BUSINESS NEWS
By Joackim Bwana | February 24th 2021
KUSCCO chairperson George Magutu (left), Embu Senator Peter Njeru Ndwiga and the ICUDE Group Managing Director George Ototo (PHOTO: Kelvin Karani)

Both levels of government, as well as other State agencies, have not remitted close to Sh4 billion of their employees’ deductions to their respective Saccos.

Kenya Union of Savings and Credit Co-operatives (Kuscco) yesterday said this had left many saccos in a serious liquidity crisis.

Kuscco Group Managing Director George Ototo said yesterday most State agencies, including universities, counties and water companies have been in default since last year following the outbreak of Covid-19.

“We would like universities, county governments, water companies and fresh produce entities compelled to release statutory deductions owed to saccos totalling Sh3.8 billion,” said Mr Ototo (pictured, right).

He spoke at Kuscco’s 6th Annual Sacco Leaders Convention in Mombasa. The meeting, bringing together representatives of over 600 saccos from across the country was opened by Embu Senator Njeru Ndwiga, who doubles up as the Chairman of the Senate Agriculture Livestock and Fisheries Committee.

Ototo said county governments should pay outstanding remittances inherited from the defunct county, municipal and town councils.

He also called for a more punitive legal framework against perennial defaulters, particularly in the public sector.

The director said the Commissioner of Cooperatives is empowered to freeze the accounts of such offenders under section 35 of the Co-operative Societies Act.

Kuscco National Chairman Geroge Magutu said the liquidity crisis had been compounded by members withdrawing their savings to survive the hard economic times occasioned by Covid-19.  

“These adjustments had a huge impact on sacco liquidity and dilemma on governance issues,” said Magutu.

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