At stake are hundreds of billions of shillings of members’ savings that have either been lost or are at risk of being lost as more and more cases of financially troubled Savings and Credit Co-operative Societies (Saccos) come to the fore. Just three Saccos; Mwalimu, Ekeza and Stima Investment Co-operative, are together estimated to have lost their members upwards of Sh3.6 billion through mismanagement or outright fraud by officials and boards.
With the situation seemingly getting out of hand, the State Department of Co-operatives has called in the Ethics and Anti-Corruption Commission (EACC) to help in investigating and prosecuting fraudulent officials to protect the savings of an estimated 14 million Kenyans who are Sacco members.
The Commissioner of Co-operatives, Mary Mungai, told the Business Daily that weak governance and outright fraud were the biggest challenge facing the co-operative movement. The State Department of Co-operatives has formed a special unit, the Ethics Commission for Co-operative Societies (ECCOS), which is involved in tracking fraud in Saccos. Eccos has signed a memorandum of understanding with the EACC to curb fraud in Saccos.
“We want to bring all Saccos under a prudential framework, strengthen the reporting line and ensure sustainability of the sector is credible and guaranteed,” said Ms Mungai. Kenya’s co-operative movement is rated among the best in Africa with over 22,000 registered co-operative societies.