Part Two: Intricate web behind financial fraud at Stima Sacco and efforts to cover up mess
Source indicates syndicate runs deep and involves former employees, Sacco employees and Sacco members
In our Part One of a Two-Part investigative series dubbed ‘Stima Sacco rocked in financial fraud, cover-up claims ahead of AGM’ by The Informer Media Group, we highlighted the rot at Stima DT Sacco Society Limited.
And in our second and final part, we unravel an intricate web involved in the fraud and efforts at damage control including issuance of cautionary public notice against former employees indicating they no longer work for the Sacco almost a decade after they left the entity.
Further, tens of members have been flagged for allegedly obtaining loans from the Sacco using forged payslips in collusion with and facilitation by rogue Sacco employees and other external parties, such as former employees who have institutional memory but have since been disengaged from active service.
“Stima DT Sacco Society wishes to inform the public and all stakeholders that Mr. Erastus Mutwiri is not an employee of the Sacco. Stima Sacco therefore disclaims any responsibility or liability for any transactions or communication purported to be from Mr. Erastus Mutwiri on behalf of the Sacco.” A public notice published on Daily Nation dated February 18, 2025 by Stima Sacco reads in part.
When contacted, neither the Stima Sacco Chief Executive Officer (CEO) Gamaliel Hassan nor the national chairman who also doubles and Kenya Power Managing Director Engineer Joseph Siror could explain the timing of the public notice despite Mutwiri having been pushed out close to a decade ago.
According to the notice, Stima Sacco said it will not be “held liable for any losses or damages incurred as a result of such unauthorised activities” by Mutwiri and that all communication on its behalf by him should be disregarded.
Our impeccable sources disclosed that former Sacco staff members and a handful of some serving are involved in the fraud racket of illegal processing of loans, some, using forged pay slips to increase the loan limit and meet the mandatory one-third rule of the salary.
“The fraud syndicate runs deep and involves former employees, Sacco employees and Sacco members. Some members have used forged pay slips to get loans and co-guarantee others,” our source who spoke on condition of anonymity revealed.
Speaking to The Informer Media Group, Stima Sacco Communications Officer Jack Kulova, however, refuted the reports, saying they were frivolous.
However, Kulova confirmed Mutwiri, whose departure from the Sacco was announced last week, left nearly a decade ago.
He claimed that Mutwiri was still pretending to be its representative often with the intent to deceive others and gain access to information by using the Sacco’s name and branding falsely.
According to Sacco Societies Regulatory Authority (SASRA) Manager in charge of Market Conduct, Anne Kago, a member can qualify to have as many loans as his/her payslip can afford subject to the one-third rule and the total loans should be a maximum of four times his deposits at any one time.
Kago says that the two-thirds rule restricts employers from deducting more than two-thirds of an employee’s salary.
This regulation plays a crucial role in loan eligibility assessment within the Sacco framework.
The one-third rule limit is applicable to only members whose loans are recovered through the checkoff system.
However, according to insiders, to increase to loan limits, some rogues sacco members with the help of the sacco employees use forged documents to justify the hefty loan disbursed to them.
Different Saccos in Kenya use many methods to obtain loans.
Some use collateral such as title deeds, guarantors, savings, logbooks, others use member’s savings, and credit appraisal besides meeting other credit terms and conditions.
Loan application requirements such as completing a loan application form, providing a copy of national Identity Card, providing certified payslips, and providing certified bank statements.
Kulova also denied that some board members were facilitating a cover up effort against those involved in the matter, saying although it was illegal for the Sacco members to present forged payslips in order to get loans.
Currently, according to information available on its website, Stima Sacco has approximately 211,000 members, has 12 branches across the country with financial assets standing at Ksh61billion as at last year.
Tomorrow, February 28, 2025, Stima Sacco will hold its 51st Annual General Meeting (AGM) to slated to be held at the College of Insurance Auditorium, South C, in Nairobi.
The government through the Co-operatives and MSMEs Cabinet Secretary Wycliffe Oparanya has ordered for a comprehensive forensic audit on all Saccos to safeguard members’ savings from financial mismanagement.
Oparanya said the audit also seeks to bring corrupt officials to justice, noting that several Saccos across the country were in financial distress, a situation that prompted the government’s decision to take action.
