The report by the Sacco Societies Regulatory Authority (SASRA) has reflected looming non-remitted funds standing at a staggering Ksh.5.04 billion in 2020 from Ksh.3.87 billion in 2019.
The highest proportion is related to employers who make deductions but fail to remit the same for loan repayment.
John Munuve, Chairman Sacco Societies Regulatory Authority-SASRA said,” the fact that a huge proportion of the non-remitted deductions owed by various employer-institutions are on account of loan repayment deductions is a matter of continued concern to the Authority as it undermines the loan performance as well as liquidity within the DT-SACCO system.”
The cooperative movement is now calling for a round table discussion to resolve the issue of non-remitted funds from employers that seems to get out of control.
Despite the stellar performance of the DT-SACCOs, during a very tough economic year, the report highlighted some of the challenges that continue to hamper the growth and development of DT-SACCOs which posted a Ksh.627.68 billion growth in 2020 from 12.75 percent in assets.
According to the sectoral report, the Authority is currently regulating a total of 175 Deposit-Taking (DT) SACCOs which serves a membership of slightly over 5.4 million Kenyans.
In their annual supervision report for the year ended December 2020, SACCOs recorded an aggregate asset base of Ksh.627.68 billion.
A loan portfolio of Ksh.Sh474.77 billion signalled a yearly increase of 13.16 percent, according to the report.
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The report shows that the highest proportion of the non-remitted deductions was owed by government agencies at Ksh.4.02 billion.
This comprises Ksh.2.95 billion owed by Public Universities and Colleges and Ksh.1.07 billion that national and county government agencies owe deposit-taking SACCOs
The problem seems to be spreading to the private sector whose share of non-remitted funds nearly doubled to Ksh.850 million in 2020.
The report further indicated that employers are increasingly failing to remit loan deductions.
SASRA’s mandate allows it to regulate, supervise, and license all the deposit-taking Saccos in the country in accordance with the Sacco Societies Act of 2008. Before a Sacco is registered, it has to comply with all the SASRA regulations.
The Sacco regulator has now called its policy makers to reform its policy, legal and administrative structures targeted in resolving their predicaments.
