Have you joined a con sacco?

The tough lending regulations set by commercial banks have locked out many small-scale businessmen from accessing loans, so when a group of traders at Westlands joined the Kenya Land Sacco, they were relieved that they could finally get access to credit.

Though reluctant at first, Dorcas Odongo, a hairdresser, eventually joined the Sacco in February 2015 after an agent put her worries to rest.

“He assured me that the sacco was registered and even invited me to visit their offices either in Kangemi or at the Krishna Centre in Westlands,” says Ms Odongo.

A visit to the Kangemi office later that month cleared her doubts so she joint the sacco.

“The agent told us that we could save as little as Sh100, and that after two months, one could apply for a loan; all you needed was a fellow member as your guarantor,” she says,  adding  that they remitted the money via mobile money transfer.

At some point the sacco introduced a new till number, claiming that the initial one was experiencing “jams”. Ms Odongo switched to the number and kept saving; after all, she  had a membership certificate.

“Sometime in early 2017, I wanted to borrow money  so I inquired from a fellow trader  whether she had ever taken a loan but she told me the sacco had moved office,” she says, “I called the agent who introduced me to the sacco, but she told me that she was no longer working  there. That is when I realised that the sacco had collapsed.”

By then  Ms Odongo  had saved Sh25,000.

Another trader, Christopher Mwilu, joined the sacco in February 2015, after being convinced to do so by his older brother, John Keo, who was already a member.

DID NOT REQUIRE MUCH

Keo, who sells fruits at the Westlands Market with Mwilu, says he was attracted to the sacco because it did not require much. “Agents walisema mtu akifikisha Sh5,000 anapewa membership (The agents said that after saving Sh5,000, one would become  a member) “says Keo, “The agents would call if we didn’t send money but at some point they went quiet, and I got worried,” he says.

Keo, 34, decided to call his agent because he wanted to apply for a loan, but the phone went unanswered. Hevisited the Kangema office but it was deserted. “When I went back a second time I was shocked to find a different sacco occupying the space,” he says.

Cases of briefcase companies and saccos conning people  are not a new. Hundreds of Kenyans lost  millionsof shillings in the Simple Homes scum. Yet others were  duped in the  Ekeza Sacco Ltd housing  projects.A former Kenya Land Sacco member who sought anonymity said the Sacco folded in in 2016 after its patron, former Imenti Central Member of Parliament Gideon Mwiti, got caught up in rape allegations.

The man, who worked as a sales agent before quitting in 2016, said that saw the closure of sacco’s  main office in Westlands.

He would recruit members new for a Sh15,000monthly retainer, plus a commission based on the number clients. He said that it was mandatory for all new employees to invest in the sacco, whose shares were worth Sh100 each. After some time, on could be given a loan, depending on one’s investment.

The employee said that the sacco had a chief executive officer, a patron and a manager, who closely presided over its operations.

He says noted that by the time he was leaving, he could see  that the sacco was heading for  collapse but maintains that his departure was precipitated by personal differences with the management.

Mr Geoffrey Njang’ombe, senior deputy commissioner for cooperatives in charge of registration and regulations, says  the Kenya Land Sacco was registered  in 2014 with their Kajiado North office, but it had problems, such as kicking out its officials, and not forwarding its accounts or records of its meetings.

OFFICIALS WERE REMOVED

“According to our officer in Kajiado, there were problems in the Sacco as they held elections then officials were removed and the ones who came on board were removed again and it never really took off effectively. They never forwarded any accounts to us,  so it was very difficult to know its status and operations of the Sacco,”said Mr Njang’ombe.

He says the officials  did not call  any meetings and when the Commissioner for Cooperatives, Ms Mary Mungai, appointed officers to find out its status in 2016,  the  officials were nowhere to be found.

He says that aggrieved members should present their case to the Cooperatives Tribunal, a quasi-judicial body under the Judiciary, which operates like a court  since as it handles disputes between new, current and past members,

“It will be easier for them to get their rights through the tribunal be the officials will be charged with contempt of court if they are summoned and they don’t show up,” u he points out.

Mr Njang’ombe says  the sacco’s officials should be  liable for  mismanagement but adds that if a sacco does not file returns every year, it is hard who the new officials are, so  the registrar can  to identify on those who registered it. 

Mr George Ototo, Kenya Union of Saccos CEO, says that once a sacco is registered under the Ministry of Cooperatives, it is given a registration certificate. “But some saccos abuse the registration through dirty operations,”

Mr Ototo advises that you find out whether the sacco you want to join hold regular annual general meetings (AGM).

“Also, talk to the Ministry of Cooperative because some saccos are pyramid schemes.”

The KUSCCO boss adds that complaints about saccos be directed to the tribunal. “The tribunal has the power to order the officials who mismanage sacco money to refund the money. And if the assets of the officials who mismanaged the sacco can be identified, t the tribunal court has the mandate to attach them,” he offered.