- Cooperative Minister Wycliffe Oparanya has stated that Savings and Credit Associations (SACCOS) have been rapidly emerging across the country
- Oparanya inaugurated a five specialist committee to review the Savings and Credit Act of 2008 and propose a structural and legal change to strengthen the management of the sector
- A audit report conducted by PriceWaterHouseCoopers (PWC) revealed that the Union of Savings and Credit Associations in Kenya (KUSCCO) had defrauded its members at Shillings 12.5 billion
The corporate ministry has suspended the registration of the new Sacco for three months from Wednesday, May 21.
Source: Twitter
Why is the new Sacco registration suspended?
The decision was due to the discovery of a huge financial saga within Kuscco, where many Sacco lost their money or part of their savings through fraud.
Minister Oparanya announced the decision at the inauguration of the Expert Committee which will review the Sacco Act of 2008 and propose important legal and institutional amendments with the aim of strengthening management.
“We have suspended the new Sacco registration for a period of three months. This moratorium will provide an opportunity for the Expert Committee to complete its review of the administration and the policy proper,” Oparanya explained.
He also cited the outbreak of many Sacco arbitrarily as one of the reasons for terminating the new registration.
What will the committee go through?
The committee, headed by Marlene Shiels, CEO of Capital Credit Union in the UK, is expected SACCOSwhich will protect investors from losing their money if Sacco is bankrupt.
In the banking sector, the Kenya Deposit Insurance Agency (KDIC) pays up to KSh 500,000 per customer if the bank is bankrupt. The Sacco Guarantee Fund will have a similar procedure.
In addition, the committee will help the sector establish a Central Liquidity Facility which will enable Sacco to obtain liquidity without having to borrow from foreign institutions.
“This committee will serve for a period of three months from now and is expected to make detailed and implementation recommendations for facial changes,” Added Oparanya.
Source: Twitter
After the appointment of the committee was made by the Commissioner for Cooperative Development, the Minister also officially launched the KUSCCO’s transition board with 11 members, which will serve for two years.
How much was lost through fraudulent fraud?
The government conducted a detailed audit of KUSCCO accounts.
The PWC audit report showed that for more than seven years, the coalition defrauded its members at 12.5 billion.
Oparanya has submitted the report to the Inspector General of Police, Douglas Kanja, for further investigation and legal action.
How Kuscco cheated its members
Minister Oparanya explained that KUSCCO had avoided the management of the SACCOS regulatory authority (SASRA) due to legal loopholes, which allowed them to work outside the formal regulatory system.
The investigation revealed that millions of dollars were raised as loans and “Confirmed by the Auditor -General who died,” The thing was used as part of a plot of fraud.
There were also evidence of recycling books, money theft, corruption, and funding in unknown ways.
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Source: TUKO.co.ke
