Summary
- An IMF technical team that was in Nairobi in August 2019 was also able to find out that they had given out loans of up to Sh118.22 billion and had taken up deposits of up to Sh117.50 billion.
- Treasury data shows that as at the end of June 2018, Saccos regulated by Sasra held Sh766 billion in assets.
- Previous IMF missions in 2015 and 2016 discussed the possibility of including non-deposit taking Saccos in monetary data.
There are more than 2,286 non-deposit taking saccos operating in Kenya, holding in excess of Sh153.2 billion in assets.
This
is according to a report by the International Monetary Fund, that sheds
light on the huge size of the societies that are not regulated by the
Sacco Societies Regulatory Authority (Sasra).
An IMF
technical team that was in Nairobi in August 2019 was also able to find
out that they had given out loans of up to Sh118.22 billion and had
taken up deposits of up to Sh117.50 billion.
Treasury data shows that as at the end of June 2018, Saccos regulated by Sasra held Sh766 billion in assets.
Previous IMF missions in 2015 and 2016 discussed the possibility of including non-deposit taking Saccos in monetary data.
The IMF said the financial data, which covered the period of up
to end of 2017, was arrived at after concerted efforts by the
Commissioner for Cooperative Development (CCD) — who regulates
non-deposit taking societies— and Sasra, which only regulates deposit
taking Saccos.
The numbers are likely to have gone up in the past two year though.
“At
the time of the previous missions, no information was available to be
able to assess their size including total assets and deposits as
non-deposit-taking Saccos did not regularly report their balance sheet
data to the CCD,” said the IMF team.
“Given their
relatively large size, the IMF mission recommended that the Central Bank
of Kenya pursue further collecting more detailed balance sheet data for
non-deposit-taking Saccos to assess the feasibility to include them in
the monetary data in cooperation with Sasra.”
The loose
regulation and large asset base of the non-deposit taking societies
therefore poses a significant risk to the economy, in contrast with
their deposit-taking counterparts under Sasra who are required to submit
timely audits and hold reserves to back their levels of risk.
For
instance, Ekeza Sacco where Sh1 billion saved by over 78,000 members
could not be accounted for, demonstrated that lax controls is risking
hundreds of billions collected from ordinary Kenyans.
In 2017, CBK and Sasra warned Kenyans against Ponzi-style investment schemes by some rogue co-operative societies.
“Such
entities entice members of the public to place money with them and
promise quick and abnormally high returns on their money or acquisition
of non-existent properties,” the joint statement read.
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