Only 60 Saccos are compliant in unclaimed assets remittances

By Our Reporter

Only 60 Saccos have submitted their unclaimed financial assets, including nil returns to Unclaimed Financial Asset Authority (UFAA) as at June 2021, the agency has revealed.

In a workshop with stakeholders on compliance by the Sacco sector to UFAA Act, 2011, the authority’s CEO and Managing Trustee Mr. John Mwangi revealed that Sacco compliance to the UFAA Act, 2011 was dismal at only 0.2 percent, implying that only Ksh.44 million had been forwarded.

According to the authority, unclaimed financial assets are undisclosed assets that are presumed abandoned, transferred to the authority by the holder, and have been deemed under any law to be innominate assets and payable to the authority.

In the Sacco sector, the unclaimed assets include Back Office Savings Account (BOSA) and Front Office Savings Account (FOSA) balances, shares, unallocated receipts, unpaid wages, and deposits for services and rent.  

“As at June, 2021, 60 Saccos had submitted unclaimed financial assets reports to UFAA, including nil returns. Out of Ksh.20 billion received, only 44 million (or 0.2 per cent) was from the Sacco sector, reflecting low levels of compliance to UFAA Act, 2011,” said Mr. Mwangi.

The banking sector leads in remittances of funds to the authority, standing at 67.07 percent followed by listed companies at 16.22 percent.  Telecommunications and insurance industries follow at 10.10 and 6.03 percent respectively, as pension funds trail at 0.14 percent.

According to the UFAA boss, the Act is retrospective in application, and applies to all assets classified as unclaimed prior to 2011.

Some of the reasons leading to unclaimed financial assets include unforeseen and unfortunate circumstances of death, change of addresses, and human frailties like forgetfulness.

Assets which have been abandoned for two years and subsequently being classified as unclaimed include travelers cheques, money orders and other related instruments, life or endowment insurance policies or annuity contracts, demutualization of an insurance company, deposits for utility services, and determination or order by court of refund by holder. Other categories are assets from dissolved business entities, those held on trustee or fiduciary capacities, and assets held in safe deposit boxes.

Unpaid wages and assets held by courts or government departments, and which have been abandoned for one year also fall under the unclaimed assets classification. At the same time, any stock, share or other intangible ownership interests in business entities deserted for three years becomes unclaimed assets.  

Mr. Mwangi urged Saccos to undertake reviews of their records and report qualifying unclaimed financial assets, as the agency explores more areas of collaboration and partnerships between Ministry and industry, Trade and Co-operatives, Sacco Regulatory Authority (SASRA), Kenya Union of Savings and Credit Co-operatives (KUSCCO) and other players in the financial sector to ensure compliance with UFAA Act, 2011.

He also revealed that the authority was engaging stakeholders on how to handle Sacco shares qualifying as unclaimed.

UFAA was created following the enactment of the Unclaimed Financial Assets Act no. 40 of 2011 with a mandate to receive, safeguard and re-unite through Unclaimed Assets Trust Funds.

The agency estimates that a total of Ksh. 241 billion is unclaimed by nearly 480,000 account holders. Nevertheless, financial assets worth Ksh.20 billion in cash, 900 million units in shares, and 2,873 safe deposit boxes have been surrendered.   

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