The non-remittance menace was noted to continue undermining the performance and competitiveness of SACCOs during the year ended December 2021. This was evidenced by the fact that a total of Kshs 3.40 billion was reportedly owed by various employer institutions to the 361-Regulated SACCOs in operation in the country.
Even though there was a general reduction in the non-remitted amounts which had stood at Kshs 5.05 billion in 2020, the owed sum of Kshs 3.40 billion is still too high in the
circumstances given that these are funds which would have improved the liquidity in the SACCO system, loaning to the membership, leave alone the opportunity costs lost.
The fact that 63.34% of the non-remitted funds owed is related to loan repayments means that the subject loans have since been classified as non-performing by the SACCOs and provisions made in respect thereof thereby reducing the surpluses and profitability of the SACCOs.
The statistical analysis shows that the public universities and tertiary colleges continued being the greatest defaulters in terms of non-remitted funds owed to SACCOs, which amounted to Kshs 1.30 billion in 2021 representing 38.03% of the total non-remitted funds. Cognizant that there are 10-Regulated SACCOs whose membership are primarily drawn from the public universities and tertiary colleges, it is clear that a sum of Kshs 1.30 billion being owed to just 10-SACCOs has the potential of greatly undermining their performance. The statistical analysis showed that the County Governments and assemblies owed the third highest amount of the non-remitted funds accounting for 18.81% of the total non-remittances.
This is ironically because it would have been expected that since the cooperative sector being a constitutional devolved function of the county government, the County Governments
ought to have been at the forefront of promoting the SACCOs by ensuring that the members’ deductions from their payrolls are promptly remitted to the respective Saccos.
Public Universities & Tertiary Colleges and County Governments owed the highest proportion of non-remitted
deductions amounting to 38.03% and 18.81% respectively.
Over the last two years, the government has been employing a multi-thronged policy, and legal and administrative measures aimed at reducing the problem of non-remitted funds owed by government institutions to the SACCO subsector. These initiatives included the presidential directive issued in November 2019 designating such non-remitted SACCO funds as pending bills that government entities are required to
budget for and give priority to paying. It is however evident that the measures being taken are bearing fruits but at a very slow pace, not sufficient to spur the growth of the SACCO subsector, thereby calling for a rethink of the measures. It is thus encouraging to note that some of the proposals aimed at addressing the problem were incorporated in the draft Cooperative Bill, which was subjected to a stakeholder consultations process and validation in the year 2021. The Authority thus looks forward to the final approval of the draft Bill, its legislation into law, and implementation, as the measures therein will go a long way in reducing the non-remittance problem in the SACCO subsector.
Statement by Mr. George Murathe, SASRA
Chairman, Board of Directors
