Complaints over delayed refund of SACCO’s savings rise 48 percent in a year

Complaints by SACCO members over the delayed refund of savings and deposits or share transfers have risen by 48 per cent in a year.

New data from the Sacco Society Regulatory Authority (SASRA) shows that filed and processed complaints on the claims shot up to 121 in 2021 from 82 in 2020.

The claims represented an estimated 55.8 per cent of all complaints received and processed relating to SACCOs by the regulator.

The refund claims made up the largest proportion of complaints for the third straight year.

Delayed refunds to SACCO members have been attributed to financial constraints faced by the savings and credit cooperatives.

“The main reason for delayed settlement of claims for refund of savings and deposits of members within the prescribed time is perennial liquidity challenges. SACCOs are thus called upon to ensure that they have adequate liquidity management plans that cater for the unexpected applications by members for a refund of their savings and deposits to avoid the backlashes and supervisory enforcement actions associated with failure to make timely refunds of savings and deposits,” SASSRA stated in its 2022 annual sector supervision report.

Further SASSRA warns a deterioration in liquidity levels, resulting in delayed refunds is likely to cause a ‘bank-run’ on SACCOs.

“Indeed, delayed refund of savings and deposits to members exiting SACCOs can trigger a liquidity run-in by other members,” SASRA added.

SACCOs are required to clear outstanding dues to departing customers within 60 days of a notice of withdrawal.

Other top complaints received by SASRA from SACCO members relate to loans and loan issuance, fraud, guarantors and guarantee for loans, irregular deduction of deposits and misuse of security/collateral by SACCOs.

Additional complaints touch on failure to pay dividends on time, CRB listing, irregular FOSA Account transactions, delayed deceased payments/pension and non-remittances/statements.