Panic has gripped over 100,000 members of Metropolitan National Sacco Ltd, formerly Kiambu Teachers Sacco, following a strategic expansion blunder by the management that has left the teachers Sacco in a financial limbo occasioned by unanticipated financial crunch.
Last year, investigators from the Sacco Societies Regulatory Authority (Sasra) raided Metropolitan National Sacco in a bid to establish its stability following its ambitious expansion that has left it without money to meet the needs of more than 100,000 members.
The April investigations were necessitated by complaints from members who could not access their salaries or loans channeled through the Sacco’s banking wing and when they did, it was restricted to an amount determined by the management.
Speaking on a condition of anonymity, a senior employee confided that the Sacco’s financial woes can be traced to an Annual General Meeting (AGM) held four years ago where Sacco Chairman Mr. Francis Ng’ang’a announced that the Sacco which had been a teachers’ borrowing and lending financial institution for four decades would open to all people.
“The Sacco has grown from a handful of members on inception to more than 60,000 members currently and we want to continue growing,” said Ng’ang’a. “We want to cast the net wider to bring people employed by government, private institutions, business people and everybody else on board”, he added.
Ng’ang’a also announced that members would be able to own houses in gated communities through mortgages. “We are living in times when people want to buy plots and own houses and that is why we will be giving mortgages to members,” he added.
Unfortunately, the management’s deviation from the core objective of the founders of the Sacco opened new loopholes of plunder through flouting of regulations governing Sacco’s in the country.
In a petition filed by a section of teachers to the Director of Criminal Investigations calling for investigations to be initiated, members expressed fear that the management could have extended to themselves, families and friends lucrative ‘loan facilities’ leading to cash shortage since the deposit refunds cannot be matched by the Sacco’s finances.
This comes at a time when Co-operative movement across the country is struggling with cases of financial impropriety, mismanagement and plunder. The recent collapse of the infamous Gakuyo Real Estate and Ekeza Sacco perhaps epitomizes the danger investors are facing in poorly run Sacco’s.
It’s no surprise those in management positions have drawn hundreds of millions investor monies to finance personal ventures. For instance, Rev. Boshop David Ngare popularly known as Gakuyo withdrew over one billion shillings belonging to investors for personal use in less than six months.
According to sources close to Sasra CEO John Mwaka, Metropolitan National Sacco’s biggest test is yet to come. “The Sacco is struggling to service liabilities of Sh5 billion owed to two commercial banks, unless we urgently place it under Statutory Management, these banks might move to auction the Sacco and members shall be on the receiving end.”, our source exuded.
In the upcoming AGM, the management shall be at pain to explain how borrowers defaulted loans in excess of Sh800 million plunging the once giant Sacco into a turmoil. “They cannot use the Nakumatt and security firm’s employees to justify their incompetence in managing this Sacco, the problem is bigger than we’re made to believe”, expressed a concerned teacher.