DCI gets SASRA nod to investigate SACCO Fraud

by Lawyer Wanz
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The Sacco Societies Regulatory Authority (SASRA) and the Directorate of Criminal Investigations (DCI) have signed a Memorandum of Understanding (MOU) to formalise the formation of the Sacco Societies Fraud Investigation Unit (SSFIU).

The signing of the MOU marks a major step in realising the Authority’s reform strategy of establishing corporate governance norms among SACCOs, as well as fulfilling President Uhuru Kenyatta’s mandate to establish the Unit announced in July 2019.

SASRA Chairman John Munuve said: ‘’ We view this MOU as an important and serious commitment to work closely with DCI in transforming the SACCO subsector.  The establishment and operationalization of the Fraud Investigations Unit, came at the most opportune time, to complete the cog of the supervisory framework of SACCOs in Kenya, which was initially largely reliant on prudential supervision.’’

Mr Munuve stated that the SSFIU is and will continue to be crucial in supplementing the traditional prudential supervision performed by SASRA’s technical personnel by taking up detected incidents of fraudulent behaviour during prudential supervision and investigating them.

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SASRA CEO Peter Njuguna together with DCI Representative John Gachomo sign the MOU to formalise the establishment of the Sacco Societies Fraud Investigation Unit (SSFIU)

In cases where criminal responsibility is established, and with the approval of the competent prosecution authorities, Mr Munuve stated that the Unit will take the lead in ensuring that the perpetrators are prosecuted and brought to justice.

“A time has come when the safety of members’ savings and deposits in Saccos must be guaranteed and always assured. This is the only way in which citizens will use or consider using Saccos as an alternative and worthy investment destinations for their savings,” added Mr Munuve.

He finished by stating that the newly created Unit would work with the Authority to design and execute comprehensive market surveillance and monitoring mechanisms to prevent or disrupt planned fraudulent activity in SACCOs. He stated that preemptive steps, rather than waiting to pursue the offenders after the losses, will be critical in preventing the loss of members’ assets.

DCI dispatched three (3) highly qualified and professional financial fraud officers to SASRA in March 2020 to establish the framework for the Unit’s operationalization.

The SSFIU has already begun working with highly skilled officers from both the DCI and SASRA, receiving and investigating information from persons and organisations in order to punish Sacco Society leaders, personnel, and other participants involved in financial and cyber-related crime.

DCI has seconded two (2) more investigative officers to the Unit to improve its capacity to follow up cases efficiently and expeditiously. The Unit now has five investigative officers from DCI.

“It is important to stress that in today’s economy, financial transactions are heavily conducted using technology and other digital services. And SACCOs have not been left behind in this. I do want to call out stakeholders within the SACCO subsector to fully embrace the newly created Unit as a lever to the transformation of the SACCO movement in Kenya,’’ DCI representative John Gachomo said

Saccos have established themselves as powerful financial sector participants, expanding wealth generation, investment, and savings while also providing financial services to unbanked Kenyans. This has necessitated more scrutiny to guarantee that members’ savings are safeguarded.

The unit will be based at SASRA and will be responsible for detecting and preventing fraud as part of better corporate governance in the Sacco sector in accordance with SASRA’s Strategic Plan 2018-2022.

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