UncategorizedKenyan Saccos Lose Sh118 Million To Employee Fraud by admin September 11, 2023 written by admin September 11, 2023 Bookmark 7Savings and credit co-operative societies (Saccos) find themselves reeling from a significant financial blow, with a staggering Sh118.1 million disappearing from their balance sheets due to fraud over the past two years.What makes this revelation even more alarming is that much of this financial foul play appears to be an inside job, orchestrated by the very staff entrusted to safeguard the interests of Sacco members. This glaring issue underscores the pressing need for Saccos to fortify their security systems and invest in comprehensive insurance coverage to shield their members’ substantial funds.The disclosure comes courtesy of the Sacco Societies Regulatory Authority (Sasra), the watchdog overseeing 359 Saccos.In a break from tradition, Sasra has made public these losses in its latest supervision report, shedding light on the precarious state of affairs within these financial institutions. At the close of the previous year, these Saccos collectively held a whopping Sh620.45 billion in deposits.However, Sasra has chosen not to reveal the identities of the affected Saccos, leaving many members in the dark.The perpetrators behind these illicit activities seem to exploit vulnerabilities in internal controls and leverage mobile money services like M-Pesa to carry out their misdeeds. It is worth noting that the Sacco sector is still awaiting the implementation of an insurance scheme that would provide much-needed protection for depositors against such losses.One disconcerting trend highlighted in Sasra’s report is that the majority of these fraudulent activities are being carried out by insiders—individuals who should be the custodians of trust within the Sacco system. While there was only one reported case of cyberattack-related fraud last year, even that incident involved complicity from within the organization.The report emphasizes, “The internal technical staff working within saccos’ ICT and credit departments have been noted to be the greatest collaborators in the perpetuation of fraudulent activities, and thus saccos are called upon to constantly review the adequacy of the internal controls in their ICT and credit functions.”Some of the instances of these fraudulent activities include unauthorized withdrawals from members’ savings accounts, with the ill-gotten gains often finding their way into M-Pesa accounts. There have also been cases where Sacco officials redirected funds for personal use or, in some audacious instances, opened unauthorized accounts to siphon off loans.In a peculiar twist, one individual went so far as to open an account in a Sacco’s name at a commercial bank and proceeded to secure loans totaling Sh1.16 million.Furthermore, Sasra’s report reveals that multiple Saccos fell victim to a spree of fraudulent transactions totaling Sh22.2 million over a single weekend in December 2021.These funds were extracted from the Saccos’ float and paybills, funneled into other M-Pesa accounts, and subsequently withdrawn, resulting in significant financial losses.In April of the same year, certain Sacco officers allegedly diverted Sh642,000 meant for M-Pesa floats and commissions earned from mobile money services for personal gain. Another alarming incident involved members of the public losing Sh63 million to an unlicensed entity masquerading as a Sacco.Equally unsettling was a case where fraudsters exploited the accounts and credentials of deceased members to access loans totaling Sh24,784, leaving Sh486,879 at risk of theft. Additionally, Sasra’s investigative unit received reports in February that certain Sacco officials had misappropriated the entity’s funds to acquire land, exposing members to a Sh55 million loss.In July of the same year, officials from an unnamed Sacco were reported to investigators for allegedly embezzling Sh55.2 million from the Sacco and channeling it to a subsidiary between 2015 and 2020. These concerning cases underscore the critical need for a rigorous reassessment of security measures and vigilant oversight within the Sacco sector. 0 comment 0 FacebookTwitterPinterestEmail admin Follow Author previous post Why Nairobi MCAs Want Liquor Board Officials Prosecuted next post Kenya Power Targets 500,000 Electric Cooking Customers You may also like Bookmark Don’t disrupt academic calendar over fees hike, minister... September 21, 2023 Bookmark Buhari ruined security architecture through nepotism, Chidoka alleges September 21, 2023 Bookmark Kwara judge seizes camera, warns Tani Olorun’s supporters September 21, 2023 Bookmark Three arrested as hunter shoots 14-year-old girl dead September 21, 2023 Bookmark PDP may lose Edo over Shaibu’s conduct, says... September 21, 2023 Bookmark Start Your Big Day in Style With This... September 20, 2023 Bookmark Martha & Richard Connected at a Networking Event... 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