Government and private sector firms are holding onto Sh4.3 billion of their employees’ Sacco deductions, which has crippled the societies’ operations.
The Kenya Union of Savings and Credit Cooperatives (Kuscco) said negotiations with individual employers in the last financial year have yielded a paltry Sh380 million.
“Some of our members are finding it a big challenge to advance loans or return member deposits. We need these deductions to be remitted,” said Kuscco Managing Director George Ototo in a statement yesterday.
He said the Sacco umbrella body had written to the Ad-hoc Committee of the Senate and the Parliamentary Committee on Trade, Industry and Co-operatives, appealing for remittance of the cash.
“So far we have seen positive results with Chuna Sacco payment of Sh275.9 million owed by the University of Nairobi,” Mr Ototo said.
“Egerton Sacco was also paid Sh5.3 million by Kisii University and Sh306 million by Egerton University by December, 2020, excluding interest and penalties.”
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At the same time, Ototo stressed the importance for senators to hasten the passing of the Sacco Societies (Amendment) Bill of 2018, which proposes changes including minimum qualifications for directors, and registration and licensing of deposit-taking Saccos.
“Since co-operatives are a devolved function, this Bill had to be taken to the Senate for approval,” he said.
He added that Kuscco had sent submissions to the National Treasury regarding co-operatives being omitted from provisions of Section 15 of the Finance Bill, which cushions borrowers from heavy taxation.
“This, we felt, discriminates against borrowers from co-operative societies for tax-deductible allowance on mortgage interest,” said Ototo.
He said it is important for policymakers to realise that Saccos do the last mile financial inclusivity, which means that savings and credit services should be accessible and affordable to every citizen.