Sacco on spot over alleged Sh500m loss
A Catholic Church Sacco is walking a tightrope due to alleged mismanagement and loss of about Sh500 million.
Documents seen by People Daily depict deliberate cover-ups orchestrated by some staff and priests after allegedly siphoning of savings through unsecured loans and fraudulent transactions.
Some of the former and current leaders, including some priests of St Francis of Assisi Ruiru Catholic Church Self-Help Group in Ruiru, Kiambu county, are now facing accusations of running down the 22,219-member Sacco.
Books of account indicate that Sacco has a share capital of Sh1.2 billion and a loan book of Sh1 billion.
Already, Sh413 million part of the loans issued has been classified as “loss” since borrowers, who include current and former officials as well as staff and some members, among them priests, companies and self-help groups have not been servicing them.
Further, Sh85 million savings have been defrauded by staff, which the management has acknowledged.
A recent audit report exposed a possible loss of another Sh8 million of “short-term savings” in the last year after the management was unable to explain the variances from Sh523,441 in 2020 to Sh7.5 million as of December 2021.
Accusations against the management include officials loaning themselves and failing to recover unpaid loans as well as a blatant breach of Sacco laws by issuing unsecured credits where money has been dished out to people who do not have shares.
This, the audit report states, had made it impossible to recover loans from former board members.
Last instalment
A Catholic Church in Ruiru, with a share deposit of Sh3.3 million, was on October 24, 2018, given Sh15 million (nearly five times its deposit) payable in 60 months, but the payments were done until March 18, 2020, and by December 2021, the balance was Sh12.1 million with an accrued interest of Sh3.6 million.
On March 27, 2019, the second loan of Sh15 million payable in 60 months was advanced to the same church, but instalments were made up to March 18, 2020, and as of December last year, it owed Sh10.8 million and further interest of Sh3.2 million.
Attempts have been made to reach Archbishop Phillip Anyolo for his intervention with demands that the current leadership be investigated and efforts to recover the loans launched.
One of the letters in our possession dated February 19, 2022, and documents including Sacco's loan book indicate how some of the current and former officials and priests have been borrowing loans but have failed to pay over the years. “...the poor leadership of one of the biggest projects under the Catholic Church in your (Archbishop Anyolo) area has led to the loss of more than Sh400 million.
These funds belong to members and instead of proper management on recovering, nothing has been done over the years,” the letter.
It adds: “I have attached an analysis for this group as of December 31, 2021 (that) PAR (portfolio at risk) stands at 40 per cent. This is the biggest I have ever seen in the history of micro-finances in our country.”
Fr Charles Mwangi, who is in charge of St Francis Assisi Church, and who acts as the patron and Sister Mary Mbaci, a director at Caritas in Nairobi, which oversights the fund confirmed that the letter had reached the Archbishop.
Other sources intimated that Archbishop Anyolo has ordered a comprehensive report on the operations of the fund.
Sister Mbaci and Antony Mugo, the manager of the fund, confessed that members’ money had been stolen by officials, who approved undeserving loans even to themselves, and fraud by some staff as a result of a weak system.
Interestingly, during the AGM, held on April 29, James Manuthu, who has been serving as the board chairman, painted a rosy picture of the Sacco’s books, whereby he highlighted “growth in investment” that he placed at 19 per cent.
Reached for comment, Manuthu threatened us with legal action should we publish the story. He, however, promised to organise a sitting at “his” office to give his side of the story before making an about-turn.
