The Sacco Societies Regulatory Authority (SASRA) has signed a Memorandum of Understanding with the Ethics and Anti-Corruption Comission (EACC) that proposes radical changes to rein in on Saccos that have in the recent past collapsed due to mismanagement, sinking with Kenyans’ hard earned money amounting to billions.
On March 18, thousands of Kenyans scammed by Ekeza Sacco and Gakuyo Real Estate firm reported to Directorate of Criminal Investigations (DCI) headquarters on Thika Road bringing traffic on the road to a standstill, all of them gave unfortunate accounts of how their life savings had been embezzled by the directors of the two entities.
With this in mind, SASRA and EACC are now proposing to conduct lifestyle audits of SACCO directors to gauge their suitability to run kitties entrusted to them by Sacco members.
This proposal is perhaps informed by Gakuyo Real Estate Director David Ngari alias Gakuyo’s extravagance who diverted Ksh2.5 billion Sacco savings to whoop up his lifestyle. Ngari moved from his two-bedroom house in Makongeni, Thika to the leafy Nyari suburb. He also went on a shopping spree of property across Nairobi.
According to the proposals, EACC will run background checks on Sacco directors on behalf of SASRA to find out if they have integrity issues and whether they meet integrity threshold to run the Saccos.
This proposal will enable EACC to go through records of individuals seeking to start Saccos before they can get the green light to establish their entities.
Speaking during the signing of the MOU, SASRA CEO John Mwaka said that the move will help protect Kenyans from fraudulent entities.
“Within that framework of this MOU we will establish a mechanism for synergy in conducting investigations on corruption offences and economic crimes and unethical offences in the cooperative sector,” said Mwaka.
EACC chief executive Twalib Mbarak said that the commission wills also be vetting Sacco systems to establish if they are prone to abuse by directors.
“Before we entrust leadership of Saccos to someone we must vet them thoroughly to establish their character. We will also conduct risk assessment and share that information with relevant stakeholders,” said Twalib.
Also mooted by SASRA and EACC is a plan to recommend stiffer penalties to rogue Sacco directors.