By Felix Wanderi
Poor decision making and bad debts have plugged Kumisa Sacco into a financial mess.
During a recent Sacco AGM held at Kirigiti stadium, it emerged that the institution started in 2013 is on the verge of collapsing owing to liquidity challenges.
The Sacco Board of Directors Secretary John Gakure informed members that some board members had overdue loans amounting to more than Sh 3 million while members had defaulted in loans worth over Sh 4 million.
The Sacco also has an outstanding loan of Sh 7.5 million taken in the year 2016 to buy a piece of land in Mai-Mahiu but the plan flopped and the money was loaned to members who in return have refused to pay back.
The Chairman of the Sacco’s supervisory committee Martin Kinyanjui said the Society is weighed down by high non-performing loans.
He noted that out of more than 2000 members who currently have loans, only about 100 were servicing their loans.
“Any member who took up a loan should pay up in order to improve the Sacco’s cash position,” said Kinyanjui.
Jonah Njoroge, Sacco’s credit committee chairman, exonerated officials from the blame saying they were given loans through the right procedures.
Members put the task the officials to explain how the Sacco intends to recover the money and how the collected money has been used. It emerged from January to July this year a total of Sh 1.5 million has been collected via mobile money platform and Sh 300,000 in cash. 43 pigs belonging to the Sacco were also sold at Sh 365,000.
Despite the money being collected, the Sacco has rent arrears of Sh 233,000 and employees have gone for months without pay.
Gakure and Njoroge however refuted claims of funds embezzlement saying the money that was being collected from loan repayment and one raised from the sale of pigs was being used to advance credit to member who had applied.
But members narrated how their bid to withdraw their savings has not been futile.
Caroline Waithera who had saved Sh 65,000 with the Sacco said she was turned away in June this year when she went to apply for a Sh 90,000 loan.
Samuel Njathi who has savings of Sh 46,000 has also been facing the same problem .His bid for the last two years to get his refund has been futile.
During the AGM, members elected a new board which they tasked with collecting all unpaid loan and revive the Sacco.
Kiambu Sub-County Cooperative officer Peter Mwangi recommended that an inquiry on the Sacco be carried out by the Commissioner of the Cooperatives.
He also called on the Sacco to appoint new debt collectors to deal with defaulters.
The officer directed that no more loan repayments will be done in cash but through bank or mobile money transfer.