Three public universities have released Sh587.2 million in statutory deductions from Savings and Credit Co-operatives (Saccos) which they had failed to remit by December last year owing to liquidity challenges caused by the Covid-19 economic fallout.
The Kenya Union of Savings and Credit Co-operatives (Kuscco) said the amount remitted by Egerton University, University of Nairobi and Kisii University is part of the total Sh4.3 billion that was owed by universities, county governments, water and fresh produce companies as at the close of 2020.
“We appealed for remittance of outstanding check-offs owed to saccos and so far we have seen positive results with Chuna Sacco payment of Sh275.9 million owed by the University of Nairobi. Egerton Sacco was also paid Sh5.3 million by Kisii University and Sh306 million by Egerton University by December, 2020, excluding interest and penalties,” Kuscco managing director George Ototo said.
Remittance of statutory, loan and members' deductions to saccos and banks is a mandatory employer obligation.
A cash crunch in most public universities, however, left them with outstanding remittances to the Kenya Revenue Authority, National Health Insurance Fund, National Social Securities Fund, pension schemes, insurers and saccos.
Non-remittances have affected credit unions financial bases leading to lending difficulties.
While employers/institutions make period deductions from members earnings and remit them to saccos, some fail to remit leading to cash flow challenges.
The first category of deductions are those meant to build members’ non-withdrawable deposits which serve as collateral for credit facilities.
The second category is those meant to periodically repay any loan or credit facilities.
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