Saccos fraud investigation unit to be set up next month

What you need to know:

The unit seeks to rein in rogue Sacco officials who have fleeced Kenyans of billions in hard earned savings.

The proposed Sacco Societies Fraud Investigation Unit (SSFIU) will be operationalised next month to rein in rogue Sacco officials who have fleeced Kenyans of billions in hard earned savings. The unit will be a collaboration between the Saccos Regulatory Authority (Sasra), the Directorate of Criminal Investigations (DCI) and the Ethics and Anti-Corruption Commission (EACC) in tackling theft and fraud in the sector. “Plans to operationalise the SSFIU are at an advanced stage and the new unit will be fashioned on the lines of the Banking Fraud Investigation Unit (BFIU) to deal with fraudsters within the Co-operative sector,” said Co-operatives Principal Secretary Ali Noor Ismail during the Harambee Sacco regional delegates meeting on Monday.

During his tenure in the Industry, Trade and Co-operatives ministry, Agriculture CS Peter Munya had in February 2019 stated that the platform would be unveiled by March last year, but this never came to be.

This was followed by a Presidential directive in July for the unit to be set up. The ministry is now expected to gazette regulations in the next month to enshrine the unit in law. Currently, Sasra’s oversight is mainly on deposit taking Saccos, which leaves thousands of savers at risk of fraud from the loosely regulated non-deposit taking entities which fashion themselves as genuine investment vehicles. In the latest data by the Treasury, total member deposits for the Sasra regulated Saccos increased to Sh766 billion over the period compared to Sh690 billion the previous year — further raising the profile of saccos in the financial sector. There are more than 2,286 non-deposit taking Saccos operating in Kenya, holding in excess of Sh153.2 billion in assets, according to an IMF report that looked at data up to December 2017. Some of the non-deposit taking Saccos, which are overseen by the Commissioner for Cooperative Development (CCD), have been operating without effective accounting systems, putting billions in savers’ funds at risk.