The Afya Co-operative Savings and Credit Society is experiencing a severe financial crisis with confidential sources at the SACCO blaming a corrupt team of advisers surrounding the National Chairman Beatrice N. Mogire, CEO Peter N. Gisembe and Chief Internal Auditor and Risk Compliance Manager CPA James O. Ondiek for the crisis.
The sources have revealed that the Internal Auditor, Mr Ondiek, allegedly raided the accounts of the Front Office Savings Account, FOSA, Kisumu Branch, in a heist-like manner where millions of shillings are said to have disappeared into thin air. Things are made worse in the Kisumu branch due to the failure by the County Governments of Kisumu remit member deductions amounting to Ksh.800 million.
Sources familiar with the ongoings at Afya Sacco hinted that SASRA is considering suspending the board of directors led by Mrs Mogire and putting in place a caretaker management team to be headed by officers from SASRA. Recently, SACCO members were unable to access loans or withdraw their shares. This situation has caused major concerns among the society’s members, many of whom are health workers who rely on Afya Sacco for their financial needs.
Confidential reports suggest that Afya Sacco could be on the verge of collapse, which could put billions of shillings of members’ hard-earned money at risk. The society has been a trusted financial institution for many health workers, providing a safe place to save money and acc loans; however, the current crisis has shaken trust and left many members in a difficult situation.
One of the main issues facing Afya Sacco is liquidity, which means the SACCO cannot provide loans or allow members to withdraw their savings.
Dividends
Likelihood of Dividends for FY2024 to miss is 99% since the sacco is at the mercy of Banks for loan at least to calm down members. But this loan will come at a cost following the interest rate for local borrowing.
Several factors may have contributed to Afya Sacco’s liquidity issues, one of them being mismanagement of funds, poor investment decisions, high levels of non-performing loans, and inadequate financial planning.
Additionally, there may be external factors at play, such as economic downturns or regulatory challenges, that have impacted negatively on society’s financial stability.
History of Wrangles
This isn’t coming as a surprise as the board was entangled in a similar war in 2020.
A vicious war erupted at the multi-billion shillings Afya Co-operative Savings and Credit Society (Sacco) with top managers and Central Management Committee (CMC) members taking on each other.
At the core of the raging battle which caused tremors in the dynamic co-operative movement, are corruption queries involving billions of shillings allegedly siphoned from the organisation since 2018.
It has even gone higher with Cabinet Secretary in charge of Co-operatives Peter Munya, a legislator in the East African Legislative Assembly and a senior Co-operatives officer being brought into the tussle as key players.
Valued at over Sh17.5 billion in terms of assets, Afya is among the top five billionaire Saccos in the country.
The cash scam is alleged to have been engineered and executed by top managers targeting the Sacco’s account at the Co-operative Bank headquarters which is managed by them.
It led to the sacking of Deputy CEO Livingstone Sakwa, Risk Management Manager Wycliffe Mworia and Vitalis Lukiri who was also the Sacco’s national chair and his deputy Simon Kariuki.
According to reports, a CMC member Prudencia Wafula said trouble erupted at the Sacco after the CMC instituted internal investigations into the circumstances under which the society had lost hundreds of millions of shillings through internal fraudulent actions since the year 2018.
Wafula said the investigations resulted in the sacking of Sakwa, Mworia and earlier ICT manager and more than 12 employees including a close relative of CEO Felix Ndoi for alleged involvement in the looting of the Sacco’s millions through its FOSA ATMs. It had allegedly lost nearly Sh1.5 billion by then.
Wafula said the crisis at organisation was triggered when the CMC recommended transfers right from the management level starting with Banking Manager to junior staff, a move, she added was blocked by Ndoi.
She claimed it was this action that made the Sacco CEO to seek Munya’s intervention through Aburi’s brokerage on allegations that the CMC was recklessly sacking top managers.
KenyanHour 