Billions Vanish in Sacco Scandal, Leaving 100,000 Kenyans in Financial Ruin

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Billions Vanish in Sacco Scandal, Leaving 100,000 Kenyans in Financial Ruin

Metropolitan

A storm is brewing at the Metropolitan National Sacco Society Limited as it now emerges that over 100,000 members have lost a staggering Ksh15 billion in savings between 2021 and 2023. The financial catastrophe has left many members—mostly teachers and civil servants—reeling, with no clear resolution in sight.

The Sacco’s interim chairperson has squarely blamed the former leadership for this financial disaster, alleging gross mismanagement and the failure to account for members’ savings. These accusations are part of a larger narrative involving a well-orchestrated syndicate within the Sacco’s top ranks that has seen billions siphoned off in a brazen display of corruption.

An audit conducted earlier this year revealed that Ksh12 billion was stolen or embezzled through a complex network involving both past and present senior staff members, as well as board directors.

The report paints a grim picture of systemic fraud, where funds were not just stolen but deliberately funneled through shadowy channels, leaving members unable to withdraw their hard-earned savings or access loans.

The scandal first surfaced three years ago after complaints from members began to mount. Desperate for answers, they found themselves blocked from accessing their own funds, leading to an outcry that prompted a more in-depth investigation.

Money

Kenyan currency on display.
Kenyans.co.ke

In April 2022, a special audit team was appointed to dig into the Sacco’s operations, uncovering shocking levels of theft and embezzlement. Despite these findings, no one has yet been prosecuted, and the stolen sums and assets remain unrecovered.

Among the most glaring revelations was the case of Ksh49 million illegally withdrawn by a teller at the Nakuru branch, exposing just one of the many holes in the Sacco’s financial controls. Moreover, Ksh7 billion was loaned out to fake members, raising questions about the integrity of the Sacco’s loan issuance procedures.

The audit also disclosed that the Sacco’s directors had authorized the payment of dividends and rebates using members’ cash deposits rather than profits—a practice that artificially inflated the Society’s balance sheet from Ksh14 billion to a deceptive Ksh28 billion. These financial gymnastics masked the true state of the Sacco’s finances, leaving it vulnerable to the kind of large-scale fraud that has now come to light.

Further irregularities included Ksh490 million in loans disbursed to Sacco employees under questionable circumstances, and Ksh176.9 million that vanished from the Kisumu, Thika, and Kiambu branches. The scale of these losses has shaken the confidence of Sacco members, many of whom now fear they may never see their savings again.

The scandal’s reach extends deep into the Sacco’s history. Originally established in 1977 as Kiambu Teachers Sacco, it later rebranded as Metropolitan Teachers Sacco before adopting its current name, Metropolitan National Sacco Society Limited, in 2009.

Over the years, the Sacco has expanded its membership beyond teachers to include all salaried individuals, businesses, commissions, and even minors. However, this growth has been overshadowed by the current crisis, which threatens to undo decades of progress.

The Sacco’s interim board, which met on Thursday, August 15, has called on government agencies, including the Directorate of Criminal Investigations (DCI), to expedite their probe and recover as much of the stolen funds as possible. 

“If the loan book was reported to be Ksh17 billion, and now we have Ksh1 billion, it means the money that we are operating with today, the money that we are giving services today is current money,” the current leadership said, acknowledging the seriousness of the situation while trying to reassure members.

Former CBK Governor Patrick Njoroge holding the new Kenyan notes

Former CBK Governor Patrick Njoroge holding the new Kenyan notes
Photo
CBK

Source: kENYANS.CO.KE

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