The failure by counties to remit deductions to Savings and Credit Cooperatives has exposed the institutions to liquidity challenges making it hard to run optimally.
Sacco industry players now say perennial failure by various employer institutions to remit SACCO deductions continues to undermine the financial performance of these financial societies, despite various policy and administrative measures being put in place to address the problem.
The trend continues despite a large number of Regulated SACCOs which draw their membership from various employer-firms and organizations continuing to operate largely on the strength of remittances from such employer firms and organizations.
Afya Sacco Cooperative chair Beatrice Mogire says that they have had to contend with delayed disbursement some running more than 15 months.
“We have counties who have not remitted money for over 15 months and others. The most current counties that remit are still behind by two months. This is Affecting us in a big way,” said Mogire.
Among the counties that were flagged for non-remittance are Marsabit, Isiolo, Wajir, Mombasa and Kakamega.
“We were affected by devolutions we were used to receive a single cheque from the government right now we receive 47 cheques while some counties are reluctant and are not remitting money on time it affected our cash flow in a way,” added Mogire.
This she says has seen members having to wait much longer to get money because the funds are not available.
Afya Sacco majorly draws close to 90 percent of its membership from civil servants in the health sector and is currently ranked fifth with an asset base Sh22billion.
According to The SASRA Annual Supervision Report released in the third quarter of 2023, SACCOs were owed close to Sh2.7 billion in non-remitted funds by various employer institutions.
The amount owed as non-remitted dues to these societies in 2022 however significantly dropped from the previous years in which a sum of Sh3.40 billion and Sh5.04 billion were reported in 2021 and 2020 respectively.
The report further notes that the progress in reducing the money owed to regulated societies, shows that SASRA's advisory note is effective in addressing non-remittance issues among financial societies.
Analysis by SASRA shows that the bulk of the non-remitted funds as of September 2022 were largely on account of loan repayments which amounted to Sh2.02 Billion which is equivalent of 74.78 percent of the total non-remitted refunds.
