The sacco movement is paying a heavy price for failure by counties to remit at least Sh800 million in workers’ monthly contributions and loan payments.
The sacco movement is paying a heavy price for failure by counties and a few agencies to remit at least Sh800 million in workers’ monthly contributions and loan payments.
This has left authorities mulling over auctioning county assets.
Senior deputy commission for Cooperatives Geoffrey Njang’ombe said nearly every county has a case of non-remittance. The amount is besides the Sh400 million defaulted by private companies.
Mr Njang’ombe said the most affected is the giant Afya Sacco, which draws over 90 per cent of its members from county governments—mostly health workers.
Ushirika, Jitengemea and Agricultural Development Cooperative saccos are also experiencing liquidity challenges.
“We have issued a warning to the counties and soon we will attach their assets if they do not remit the workers’ contributions and loan funds,” he said.
Mombasa government is the most notorious for non-remittance and the official said unspecified legal action has been taken on the devolved unit.
Other counties the department of Cooperatives is planning to take legal actions are Nairobi, Murang’a and Tharaka Nithi.
Counties have equally been notorious for not remitting other statutory contributions including billions in pension.
“We have issues with almost all county governments except those in northern Kenya,” he said.
Afya Sacco CEO Felix Ndoi said they were doing well despite the challenges.
“We are working to increase our share capital to enable our members continue to enjoy better dividends each year,” he said.
The sacco has announced an eight per cent dividend and a 10 per cent rebate payout.
Its chairman Vitalis Lukiri said delays in remittance and recovery of loans by counties has had a huge impact on liquidity thus affecting timely release of loans.
Before devolution, he said, they were able to get members contributions on time as salaries were being paid at once by the national government.