Public warned against 3,820 illegal Saccos

Members of unlicensed Savings and Credit Co-operative Societies ( Saccos) are at risk of losing their savings.

According to the regulator, Saccos Societies Regulatory Authority, only 176 Saccos are officially licensed to take in deposits from clients and members.

Another list of five Saccos have been granted restricted licences to take in deposits for six months ending in June this year.

Available figures indicate that there are at least 4,000 licensed Saccos in the country.

However, it has emerged that most of these Saccos illegally take in deposits from Kenyans without the knowledge of the regulator.

The authority’s Chief Executive Officer Carilus Ademba has therefore, warned Kenyans from depositing cash in unlicensed Saccos saying they are doing so at their own peril and that the authority will not be held accountable if the Saccos disappear with their money.

Mr Ademba noted that the authority is in the process of cracking down on the illegal Saccos in order to safeguard Kenyans money.

“Notice is given to the public and other private entities who engage in any form of deposit-taking Sacco business transactions that dealing with any Sacco not licensed, they shall be doing so at their own peril,” he said.

He added that the law regulating deposit-taking Saccos makes it a criminal offence for any person to engage in deposit-taking Sacco business without a valid licence from the authority.

The regulator also cautioned such Saccos saying they face criminal proceedings for operating illegally and endangering members money.

Those operating illegally face up to fine of Sh500,000 and or imprisonment for three years.

The total Sacco sub-sector assets stand at Sh293 billion with a total membership of about three million as at December 2012.

Total deposits for the sector stand at Sh213 billion and loans to members are at Sh221 billion.

The Sacco sub-sector comprises both Deposit Taking and non-Deposit Taking Saccos.