Sacco boards accused of misusing members’ savings through extravagant foreign trips, manipulated financial records, and excessive borrowing are facing intensified government scrutiny as new reforms gather momentum.
Speaking during a recent Sacco Annual Delegates Meeting in Nairobi, Patrick Kilemi said the government is advancing policy and legislative reforms aimed at strengthening accountability and curbing misconduct within the Sacco sector.
Kilemi criticized some Sacco boards for turning members’ deposits into a source of funding for unnecessary overseas travel. According to the Principal Secretary, certain officials have been collaborating with tour firms to justify frequent foreign benchmarking trips that yield little or no value to members.
He warned that the Ministry will now subject such trips to stricter scrutiny and promote local benchmarking initiatives by encouraging Saccos to learn from successful institutions within the country instead of relying on costly foreign excursions.
At the same event, David Obonyo cautioned against the growing trend of Saccos manipulating financial statements in order to declare attractive dividends. He described the practice as dangerous and unsustainable, warning that it poses a serious threat to the stability of the cooperative movement.
To address the issue, the government plans to push large Saccos toward engaging internationally recognized audit firms in a move aimed at improving financial transparency and strengthening oversight standards. The reforms will also target reckless borrowing by some Saccos, with officials expressing concern over institutions taking on debt levels that undermine members’ financial security and long-term sustainability.
