PUBLIC CAUTION AGAINST UNDERTAKING REGULATED SACCO BUSINESS WITH UNAUTHORIZED ENTITIES

The Sacco Societies Regulatory Authority (SASRA) has issued a public caution against undertaking regulated Sacco business with unauthorized entities. SASRA said its attention has been drawn to the fact that a large section of the public and institutions are still undertaking regulated Sacco business with entities that are neither licensed nor authorized to do such business as provided for in the Sacco Societies Act and other regulations.

The regulator said it had picked a trend in which public and private sector companies, institutions, and entities are facilitating unauthorized entities to undertake regulated Sacco business. This is through making deductions from salaries and wages or other income from their employees and remitting the same to unauthorized entities. Others provide electronic and digital channels through which public funds are paid to and or from authorized entities.

SASRA says such incidences often result in the loss of funds by members of the public with no recourse whenever such unauthorized institutions fail to meet their financial obligations.

The caution, therefore, calls on the public and institutions to ensure that they only transact with licensed and authorized Sacco entities. The regulator also urged employers and other entities facilitating the unauthorized Saccos to stop their operations and instead direct their employees and public members to transact only with authorized Sacco entities.

The regulator also assured the public that it will continue to monitor the sector and take appropriate action against any person or institution found to be contravening the regulatory provisions. The regulator has thus put on notice all public members, including public and private sector employer institutions, against dealing with or undertaking regulated Sacco business with unauthorized entities, whether styled as Saccos or not, saying those persons involved are doing so at their own risk and peril.

It urges caution and advises members of the public to undertake due diligence before placing their savings or deposits with any outfit purporting to be a regulated Sacco.

“Public and private sector companies, institutions and entities should cease from facilitating authorized entities to undertake illegal regulated Sacco business through deductions and remittances and or providing electronic and digital channels and conduits to undertake such illegal Sacco business,” said Peter Njuguna, SASRA Chief Executive Officer.

SASRA is the government’s principal agency responsible for licensing and authorizing Sacco Societies to undertake deposit-taking Sacco businesses or specified non-deposit-taking Sacco businesses, respectively.

While Saccos are the most preferred choice for those seeking dividends and rebates, illegal outfits have since cropped up to steal from the clueless public.

This SASRA caution comes even as it carries a probe on KUSCCO, which it suspects of engaging in unauthorized Sacco business.