KUSCCO raises concern over Sh4.2b unremitted staff dues
By Reuben.Mwambingu, February 22, 2023Savings and Credit Co-operative Societies (Sacco) are claiming more than Sh4.2 billion owed to them by various entities, including county governments, universities, parastatals and private institutions.
Kenya Union of Savings and Credit Co-operatives (KUSCCO) Group Managing director George Ototo (pictured) said the above situation has continued to choke smooth running of Saccos. Addressing the press on the sidelines of the 8th Sacco leaders convention in Mombasa, Ototo called on the government through the Cabinet Secretary, Ministry of Co-operatives and Micro, Small and Medium Enterprises( MSMEs), Simon Chelugui to intervene and assist expedite recovery of the amounts.
According to Ototo, defunct Municipal Councils that were succeeded by County governments owe Saccos about Sh1.4 billion while State-owned organisations such as universities and parastatals, water companies and fresh produce entities owe deductions of over Sh3.4 billion as per Sacco Supervision report 2021.
“Among the challenges that we are facing includes non-remittance of Sacco dues by employers which resulted in liquidity challenges, where some Saccos are unable to disburse loans adequately and efficiently leading to loss of members’ confidence,” the Kuscco boss stated.
Defunct councils
Ototo reckoned that data from affected Saccos indicate a deficit to the tune of Sh1.2 billion owed to them from defunct Municipal Councils which are now counties.
Some of the counties that contribute to the pending bills to Saccos include Kilifi, Mombasa, Murang’a, Kakamega, Vihiga among other counties.
At the same time, Ototo flagged the absence of a tax incentive for mortgages in the co-operative sector, noting that there is need to amend section 15 (3) (b) to allow borrowers from co-operatives qualify for deductible allowance in mortgage interests on owner occupied residential houses. This, he said, will eliminate discrimination and promote competitiveness in mortgage sector.
“We therefore request the government to assist us in fast-tracking the implementation of a mortgage relief for the co-operative societies,” the Kuscco boss noted.