By Roy Hezron
Public universities and other tertiary institutions have been accused of failing to remit members’ deductions to Saccos.
The Sacco Societies Regulatory Authority (Sasra), in its annual report, says that the highest proportion of total non-remitted deductions are owed by public universities and colleges.
With five deposit-taking Sacco societies whose membership are directly drawn from the public universities and other tertiary institutions, the non-remittance is likely to impair the ability of the Saccos to meet their financial obligations to members, and affect their financial stability.
“The highest proportion of the total non-remitted deductions amounting to Sh2.86 billion, representing 74.03 per cent of the total non-remitted deductions was owed by the public universities and tertiary colleges,” Sasra says in the report which was released recently.
The report adds: “Although, the Authority has issued short-term administrative directives to Saccos with a view to addressing the problem, long term policy and legal interventions are called for to reverse the situation.”
The total amount which was not remitted to the deposit-taking Saccos increased to Sh3.86 billion last year.
“As at September 2019, various employer-institutions owed Saccos a total of Sh3.86 billion in unremitted deductions, out of which Sh3.42 billion were deductions meant for repayment of loans and other credit facilities issued to members by the Saccos, with the balance being on account of non-withdrawable deposits,” the report disclosed.
Government–based and teacher-based deposit-taking Saccos continue to control the largest proportion of the market share of the deposit-taking Sacco segments’ total deposits and assets, with 36 government-based Saccos controlling 37.55 per cent of assets and 38.07 per cent of deposits.
On the other hand, 43 teacher-based deposit-taking Saccos control 36.69 per cent of the segments’ assets and 35.82 per cent of the deposits.
This means that 79 Saccos whose membership is directly drawn from government and government-related institutions as employers, control 74.24 per cent and 73.89 per cent of assets and deposits respectively.
The remaining 93 deposit-taking Saccos share 25.76 and 26.11 per cent of the assets and deposits respectively.
“It also underscores the important role that government and government related institutions play in the continued vibrancy of the Sacco subsector in the country,” added Sasra in the report.