Saccos regulation: Anti-fraud unit to be established under SASRA

The Cabinet is set to approve a cabinet memo before it to allow the Cooperative department to set up an anti-fraud unit under the Sacco Societies Regulatory Authority – SASRA.

“CID officers will be seconded to SASRA and supported to carry out day-to-day investigation and detection of fraud just like other financial regulatory authorities in the country,| says Cabinet Secretary, Peter Munya, in charge of Trade and Industrialization.

“Since this is an administrative decision, we will just administratively create a unit without passing any law and DCI is ready to allow us to do that.”

The unit will be tasked with fraud, money laundering and false accounting, with auditors and financial engineers making up the team.

Some of the financial regulatory institutions that have anti-fraud units include; Capital Markets Authority and Central Bank of Kenya.

The efforts are geared towards streamlining the sector that has recently faced numerous challenges, more so with cases of reported misappropriation of members’ contributions by unscrupulous sacco officials.

“So we are responding pro-actively to the challenges that have emerged to make sure the sector is on the right trajectory towards it contribution to the country’s economy,’’ avers Munya.

It is estimated that 40% of the country’s savings are in the sacco movement, mostly by members.

However, incidences of liquidity shortage occasioned by lack of remittance by employers on member contributions has been on the rise. The government is warning of dire consequences to such employers.

“The law allows us to freeze accounts of such employers. It is not their money but savings and contributions by members who are the employees.”

Saccos play a crucial role in development of the country in terms of mobilization of savings, employment, support for livelihoods and the general growth of the country’s GDP.

The sacco sector boasts of a loan portfolio KSh440 billion, deposits of KSH430 billion and an asset base of over KSh600 billion that is in circulation for members’ use.


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