Harambee Sacco members in panic withdrawal

By Michael Oriedo

Frequent discussions of the affairs of Harambee Co-operative Savings and Credit Society in Parliament are frustrating its operations.

The institution’s General Manager James Wandera says repeated debates on the Sacco by MPs have made some members withdraw their contributions for fear of losing their money.

"The questions and debates in Parliament have caused adverse publicity and contributed to panicky withdrawal of members from the society," Wandera says.

In the past three months, he says, more than 1,000 members have pulled out, citing concerns by MPs.

"Since May, 1,115 members have withdrawn their contributions amounting to more than Sh109 million, saying they are scared of losing their money having followed debates in Parliament," he says.

The institution is now reading malice in the debates and some of the questions MPs ask.

Six questions have been asked in Parliament about the institution since March.

"Some are on matters that were handled and concluded in 2003. In other instances, the name of the society is dragged into matters concerning civil servants employed in different ministries," he says.

Interestingly, Wandera notes that some of the documents, which inform members’ discussions on the Sacco are falsified.

"The documents are signed by people, some who were dismissed from the institution for misappropriation of funds and have pending cases in courts. Others have never been members of the society yet they claim to have contributed money to the Sacco,’’ he says.

The institution has written to the Speaker of the National Assembly, Kenneth Marende registering its worries about the abuse of parliamentary privilege to malign a members’ savings and credit society.

"An MP has used parliamentary privileges to persistently attack a defenseless private business entity thereby seriously hurting the society and welfare of our members," the letter reads.

investigations file

In a question asked on August 17, Gichugu MP Martha Karua sought to know what the Attorney General, Amos Wako, had done on an investigation file on the institution.

"What action has he taken on the Harambee Sacco Society investigations file forwarded to him by the Kenya Anti-Corruption Commission (KACC) on August 12, 2003," Karua asked.

In his response, the AG said he had ordered for a forensic audit into the case in which seven members of a commission of inquiry appointed to investigate the Sacco were accused of receiving fraudulently allowances amounting to Sh7 million.

The people involved in the matter, Wandera says, were civil servants appointed by the then Deputy Registrar of Co-operatives Development and Marketing to look into affairs of the Sacco.

The members were investigated for receiving undue allowances from the giant society.

"Investigations into the case revealed that only one person had committed the offence and he was ordered to repay the money totaling to Sh246, 000," Wandera says.

In another debate on the institution on August 31, a legislator called for the disbandment of the society’s management team.

"Could he (Attorney General) dissolve or suspend the Central Management Committee (of Harambee Sacco) so that investigations take place when they are out of office?" Ikolomani MP, Bonny Khalwale, asked.

However, Wako said he does not have powers to dismiss the team.

"I think the powers lie somewhere in the Ministry of Co-operative Development and Marketing to where the question should be directed," he answered.

Wandera views the debate as an attack and interference on the business of the institution since delegates elect the officials during the Annual General Meeting.

"This paints the society as a corrupt, loss making institution yet it is the most profitable Sacco," he says.

If this trend continues, it would result in reduced profits, loss of employment, and perhaps collapse of the institution, he says.

illegal dealings

The ultimate losers will be struggling members who rely on the Sacco for savings and credit.

Previously, the giant society with more than 100, 000 members, mainly drawn from the Civil Service, has been stalked with claims of illegal dealings and financial impropriety. Some of these allegations have been investigated and cleared by the Criminal Investigations Department.

In 2001, the Government appointed a team, led by Sylvester Mwaliko to investigate the Sacco, which had then been riddled with financial mismanagement, and come up with suggestions to improve service delivery.

Among the key recommendations the team came up with was that the Sacco headquarters, Harambee Plaza, be managed as a separate entity, preferably as a housing co-operative under an independent management committee.

Despite the woes, the society has had a massive financial turn around. This year, it recorded a profit of Sh713million, and members were paid a dividend of six per cent on shares held.

Members’ deposits have grown from Sh4.3 billion in 2002, to Sh8.63 billion last year.

Similarly, Harambee Sacco assets have doubled to Sh12.4 billion during the same period.