How Kenyans lose money to unlicensed online SACCOs

Below are some of the online apps that have been previously flagged by KUSCCO.

 Closer up of woman using smart phone

Kenyans are at risk of losing their hard-earned savings through online SACCOs and investment schemes that are not licensed.

According to information from the Kenya Union of Savings and Credit Cooperatives Limited (KUSCCO), digital deposit-taking saccos and schemes sign up users online and begin to take in savings via mobile money platforms, with some promising handsome returns.

In Kenya, the Central Bank of Kenya and Sacco Societies Regulatory Authority (SASRA) are the sole licensing authorities for deposit-taking institutions in Kenya.

Below are some of the online apps that have been previously flagged by KUSCCO.

For example, Milazi described itself as an online investment cooperative society where investors sign up online and deposit cash using mobile money.

Homepesa Sacco, which was not licenced by SASRA, took withdrawable deposits. It was initially registered to only undertake back-office operations.

Homepesa Wallet enables you to deposit and withdraw cash, anywhere any time. Deposits can be done via M-Pesa and credit cards while withdrawals are done via M-Pesa and bank transfers,” the sacco described on its website.

Zeepo, a network of mobile money and banking agents, also offers customers a savings option through a mobile app or signing up via the web.

Save, borrow, pay, transfer and insure from one place — on mobile or an outlet near you, so that life doesn’t have to stop because of closing time, tedious processes or red-tape,” Zeepo says on its website.

J-Hela, which describes itself as a mobile SACCO platform, is also taking withdrawable deposits without a SASRA licence.

J-Hela is owned by Patrick Wainaina, the chief executive of Jungle Nuts, a macadamia nuts processor in Thika. Wainaina is vying to be the Kiambu Governor on an independent ticket.

Withdrawal is from J-Hela to M-Pesa using withdrawal J-Hela withdrawing procedures. There is an upcoming service to withdraw from J-Hela to ATM. No limited amount when withdrawing but the membership fee of Sh60 remains as the minimum balance,” says the platform on its portal.

Milazi, Zeepo, J-Hela and Homepesa Sacco are not part of the latest list of authorised SACCOs issued by the SASRA.

After being flagged, Milazi, Zeepo and Homepesa closed shop unlike J-Hela which is still in operation.

Some of the clients who lost their life savings said that they were lured by the promise of a better life.

Some of those who lost money include Nicholas Kinoti and Quincy Mukaria who were produce brokers in Meru.

They explained that they lost the trust of farmers who accused them of making away with their money.

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