Kiambu 'hustlers' Sacco collapses with Sh33m members' savings

Members of a Sacco based at Kirigiti centre in Kiambu town have appealed to the DCI and the commissioner for cooperatives to help them get their savings.

They say Kumisa Savings and Credit Cooperative—a Sh10-savings society—has collapsed and they stand to lose millions of shillings in savings.

More than 3,000 members sought an audience with Kiambu subcounty cooperative officer Stephen Mwangi over their deposits. Some have moved to court to recover their cash.

The Sacco was started by former Riabai MCA Martin Wachira. It targeted low-income earners like hawkers, market sellers, touts, casual labourers and domestic house workers.

They welcomed the idea and joined in droves, giving it the impetus it needed and in two-and-a-half years it had attracted more than 3,000 members. Wachira later handed over the Sacco to members as he sought to focus on his pursuit of a political career.

Henry Kinge, chairman of the supervisory committee who was appointed by members after the former management was accused of running down the Sacco, said it had been doing well in the first two years after its inception.

“The Sacco was doing well as members would save and take loans. It reached a point where members would apply for loans and one could not get it,” he said.

He blamed the problem on mismanagement, adding that those in management misused their cash and did not follow up on loan repayments. "Some of the money saved by members was used inappropriately by the management."

Kinge said the management started a mega project of rearing pigs and chickens to boost their investment. The chicken project failed but the pig project went on smoothly but there was little to show for it.

"After some time, as the supervisory team, we came to realise the pig project was not registered under Kumisa Sacco. Instead, the management had registered it under a private company. We realised this when the management could not account for some money and the Sacco was going down,” Kinge said.  

Mwangi DCO said the Sacco was being operated through fraud as most of the daily savings were not taken to the bank but instead ended up in officials' pockets. He said Sacco premises owe Sh912,000 in rent arrears and the landlord has no option but to auction Sacco property to recover the debt.

Records show that in the first year, they raised more than Sh11 million in savings. The membership was drawn from Kirigiti, Riabai, Mai Mahiu and Maera. After two years, they had more than Sh33 million.

"All of a sudden, when members applied for loans, they were informed there was no money and yet the total assets were in excess of Sh33 million. We became suspicious and realised we were being played. Our money had been embezzled,” Kinge said.

He said the pig-chicken projects cost members Sh1.4 million. They were told all the chicken died and the profit from the pig sales was so low it was not even known where the money was.

"The pig project, through the documentation that we have, was registered under a private limited company owned by five members who were in the Sacco management with shares of 100,000 split among themselves equally. This further showed the Sacco facilitated the project without members' knowledge,” Kinge said.

He said they wrote to the Kiambu subcounty cooperative officer to write to the commissioner for cooperatives to conduct an enquiry so members can know where their money is.

"The commissioner for cooperatives responded saying the Sacco should pay money for the enquiry to be conducted, but in the Sacco accounts the balance was zero. There were so many accounts opened for the Sacco and it seemed it was one way by the management to use the accounts to syphon members hard-earned cash,” Kinge said.

He said the commissioner has agreed to investigate but at a fee of Sh400,000 and the appointment of five members to help in the process. The members, however, say they cannot afford the fee.