How non-remittance is killing Saccos
Sacco Societies Regulatory Authority has raised a red flag over increasing non-remitted deductions to Saccos.
Employer-institutions hold over Sh3.86 billion as at September 2019 according to the Authority’s latest annual supervision report. Sasra stated that the situation is getting worse as the figure grew from Sh 2.81 billion a year ago affecting efficient and effective operations of many DT-SACCOs.
“The Authority’s greatest concern is that over 74% of the total non-remitted deductions in 2019 was owed by Public Universities and Tertiary Colleges, yet these employer-institutions serve five key DT-SACCOs with a huge membership. It is therefore apparent that the financial operations, service delivery, soundness and sustainability of these DT-SACCOs, will continue to be hampered in the immediate to short term unless the trend is drastically changed,” said John Munuve, Chairman, Sasra Board of Directors.
Despite President Uhuru Kenyatta issuing a directive in November 2019, requiring governmental institutions and agencies to prioritize the budgeting for, and settlement of, non-remitted SACCO deductions, it appears little has been achieved.
“It is hoped that the most affected Government institutions and agencies, such as the Public Universities and Tertiary Colleges, shall comply with the directive, so as to reduce, if not to totally eliminate the perennial menace of non-remitted deductions in the SACCO subsector,” Munuve said.
The Authority also issued an advisory note to Saccos on the appropriate administrative measures
to reduce these perennial incidences of default in remittances.
Sasra has also called out for a more punitive legal framework against such perennial defaulters, particularly those within the public sector, which often than not, hide under the veil of inadequate appropriation of funds by the Government.
