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How saccos in Kenya are addressing non-remittance of funds

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NJIRAINI MUCHIRA

By NJIRAINI MUCHIRA
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A majority of deposit-taking Saccos in Kenya are experiencing financial instability due to failure by state agencies and private companies to remit statutory deductions on time.

As the government streamlines savings and credit co-operative societies that are reeling under the weight of mismanagement, fraud and bad loans, failure by employers to remit deductions is increasingly becoming a big threat to the survival of many saccos.

To tackle this, the Sacco Society Regulatory Authority (Sasra) is developing legal and institutional proposals to protect saccos from such employers.

Sasra statistics show that by end of last year, employers in the public and private sector owed deposit taking saccos $26.7 million in unremitted deductions.

The deductions were in the form of either loan recovery or non-withdrawable deposit accounts, popularly known as back office service activities.

Of the unremitted deduction, 79 per cent were meant for loan repayment and 21 per cent for non-withdrawable deposits contributions.

“The perennial failure by various employer-institutions to remit deductions made from employees’ emoluments has had serious adverse effects on the financial soundness of various saccos,” said John Mwaka, Sasra chief executive through a circular seen by The EastAfrican.

Among the challenges saccos are facing include failure to meet and maintain prudential standards especially the liquidity ratio and capital adequacy ratio, liquidity constraints making it impossible to issue new loans and plunging them deeper into loss making.

The problem is compounded by the new stringent IFRS9 financial reporting standards that have hit all deposit-taking saccos further squeezing earnings.

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Under IFRS9, capital adequacy, asset quality, earnings and liquidity remains key criteria for monitoring, evaluating and measuring the financial soundness and stability saccos.

The challenge is not limited to Saccos but failure by employers to remit deductions is also having a negative impact on Sacco members who are unable to get loans, while some get listed with credit reference bureaus and others are denied credit for lack of collateral.

Worse still, the trend is threatening the stability of Kenya’s financial services sector and the economy owing to the fact that the sector is worth about $10 billion in assets.

Sasra data indicate that Saccos employ more than 500,000 Kenyans directly and another 1.5 million indirectly.

Sacco savings and deposits are estimated at over $7 billion, equivalent to about 30 per cent of national savings while the loan portfolio is in excess of $6.6 billion.

Mr Mwaka says Sasra is in the process of amending the legal framework to act against employers who fail to remit statutory deductions by taking advantage of   weak laws incapable of deterring defaulters.

“The authority is developing proposals to amend the existing legal framework which will deter perennial defaulters and ease the procedures for recovering any defaulted remittances,” he said.

The push to ensure employers remit deductions come when the Sacco sector in Kenya is grappling with a confidence crisis due to mismanagement and fraud, a problem that has seen members lose billions of saving.

Sasra will come up with new market conduct regulations to tame malpractices like inflated charges, delays in reimbursement of deposits and “reckless” lending.

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Tanzania reviews law on mediation for investors

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BOB KARASHANI

By BOB KARASHANI
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Tanzania is set to review the contentious arbitration law. A key part of the draft Bill for the proposed 2020 Arbitration Act, tabled in parliament on January 28, includes clauses allowing investors to access international arbitration.

The draft Bill comes on the back of new arbitration announcements filed last month by several multinational mining companies over cancelled retention licences.

It also coincided with a new profit-sharing deal between Tanzania and Canadian mining giant Barrick Gold Corp for the three Barrick-owned gold mines in the country.

One of Tanzania’s concessions to Barrick in the new deal is the right to seek international arbitration in case of disputes.

The draft Bill proposes amendments covering sovereignty over Tanzania’s natural resources and public-private-partnership (PPP) ventures with foreign parties; domestic and international commercial arbitration, as well as “enforcement of foreign arbitral awards” and related matters.

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For example, on PPPs the draft proposes changes that would allow dispute resolution by outside arbitration bodies provided that the proceedings are held in Tanzania.

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This follows amendments to the PPP Act in 2018 that required institutions administering all arbitrations to be from Tanzania.

The amended law will also create a Tanzania Arbitration Centre to host all mediation and deal with arbitrator accreditations.

Canadian firm Winshear Gold Corporation served noticed of intent to litigate on January 10, followed by Australian miner Indiana Resources Ltd on January 15.

Both companies are claiming that Tanzania breached the 2013 Agreement for the Promotion and Reciprocal Protection of Investments—also known as the Bilateral Investment Treaty—along with various international laws and conventions.

They have both declared that they will “pursue any means available”, including going as far as international tribunal level, to protect their investments in Tanzania.

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No sign of engine failure in Kobe Bryant helicopter crash: NTSB : The Standard

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Smoke rises from the site of the helicopter crash in Calabasas, California, on January 26 that killed NBA icon Kobe Bryant, his daughter Gianna and seven others. The NTSB says there is no indication that engine failure was a factor. [AFP/File / Mark RALSTON]

Wreckage at the scene of the helicopter crash that killed NBA great Kobe Bryant and eight others showed no evidence of engine failure, a preliminary report from the National Transportation Safety Board (NTSB) said Friday.


Bryant and his 13-year-old daughter Gianna were among the nine who perished when the helicopter crashed in rugged terrain west of Los Angeles on January 26.

“All significant components of the helicopter were located within the wreckage area,” according to the report. “Examination of the main and tail rotor assemblies found damage consistent with powered rotation at the time of impact.

“Viewable sections of the engines showed no evidence of an uncontained or catastrophic internal failure.

SEE ALSO :Nine people dead in Kobe Bryant helicopter crash: official

“The No. 2 engine first-stage compressor blades exhibited tip curl in the direction opposite of rotation, consistent with powered rotation at the time of impact.”

Friday’s report was a summary of investigators’ findings so far. A final report identifying the cause of the crash is expected to take at least a year to complete.

Investigators from the NTSB and other bodies are considering what role heavy fog that Sunday morning might have played.

For More of This and Other Stories, Grab Your Copy of the Standard Newspaper.  

“Our investigators have already developed a substantial amount of evidence about the circumstances of this tragic crash,” NTSB Chairman Robert Sumwalt said in a statement.

“And we are confident that we will be able to determine its cause as well as any factors that contributed to it so we can make safety recommendations to prevent accidents like this from occurring again.”

SEE ALSO :Kobe Bryant’s final tweet hours before dying in helicopter crash

In addition to 41-year-old Bryant and Gianna, those killed in the crash were her basketball teammates Alyssa Altobelli and Payton Chester, Alyssa’s parents John and Keri Altobelli, Payton’s mother Sarah Chester, basketball coach Christina Mauser and pilot Ara Zobayan.

They were heading to a girls’ basketball tournament at Bryant’s Mamba Sports Academy in suburban Thousand Oaks having departed from John Wayne Airport in Orange County.

The deaths rocked the NBA and the wider sporting world as well as Los Angeles — where Bryant won five NBA titles playing for all of his 20-year career with the Los Angeles Lakers.

Memorials sprang up around the city as fans left flowers, balloons, basketballs, stuffed animals, jerseys and other memorabilia in Bryant’s honor at the Lakers’ Staples Center arena, the team training facility in suburban El Segundo and as close to the crash site as they could get.

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The Lakers honored Bryant with a pre-game ceremony less than a week after his death and a public memorial for Bryant and the other victims has reportedly been scheduled for February 24 at Staples Center.

SEE ALSO :The 29-year-old helicopter in which Kobe Bryant and his daughter died

The report includes photographs of the crash area in the Santa Monica Mountains, including one from a witness near the site and one from a security camera that shows the helicopter flying into clouds.

It also includes comments from a witness who was on a mountain bike trail and told investigators he heard the helicopter approaching.

He said he saw the blue and white helicopter emerge from the clouds, travelling forward and down, observing it for about two seconds before it crashed.



Do not miss out on the latest news. Join the Standard Digital Telegram channel HERE.

Kobe BryantNational Transportation Safety BoardNTSBGianna Bryant

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How the Boma International Hospitality College is changing the hospitality and fine dining training industry : The Standard

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Are you a high school graduate who has a desire to venture into the hospitality business? Are you someone who has always desired to go into the hotel business? You have been searching for the best college to go to for the necessary skills and are on the verge of giving up on your dream? Or are you currently in the hotel business but are looking to sharpen your skills and get internationally recognized school certificates? Here is a college that is looking to help you nurture your talents, ambitions and give you the vital skills to venture in this industry,


The Boma International Hospitality College (BIHC) in partnership with the Business and Hotel Management School (BHMS) in Switzerland are looking to nurture your interest in the hospitality industry and empower your ambitions. They have a developed state of the art study program which is designed to facilitate access to demanding, while rewarding careers.

BIHC, through their Professional Hospitality Development Program, have set out to train and retrain professionals across various departments of the Hospitality Industry through tailor- made programs and short courses. These involve, front office operations, food and beverage service techniques, professional chefs’ course, housekeeping and laundry operations, among others. This program will not only rejuvenate the student by improving their skill- set but also affirm BIHC’s stand as a top national and regional leader in hospitality training.


Students in class at The Boma International Hospitality College.

The curriculum maintains a strong emphasis on Swiss tradition of balancing theories with immediate practical applications within the and most central operating areas. These are, the Food and Beverage and Rooms Division departments at the Boma Hotel Complex which are part of the Applied Hotel Operations module.

This college is fully equipped with all the necessary equipment. Fitted with modern training kitchens, training restaurants and bars and access to all front and back-of – the house facilities of The Boma Hotels. These include Front office, Housekeeping, Spa and Health Club areas. There has been a recent expansion of facilities and introduction of a new e-learning Resource Centre and lecture rooms equipped with the latest audio-visual equipment, labs and a computer center. Alongside all these good things, all students have good access to Internet, Intranet and Campus- wide wireless connection.

Theory can get boring but at BIHC, they don’t just prioritize that since there are obviously practicals for you while you are enrolled there, I mean how else will you know how to cook and be an expert in hospitality if you don’t practice it? However, that’s not all, at the Boma Franchise, the programs include periods of externships at leading international and local hospitality brands, where the students are expected to prove their skills, knowledge and attitudes. This is done under direct monitoring of professionals who ensure to do their very best to provide guidance for the students’ professional benefit. The students, that is You and I… may undertake PAID International Internship programs in the USA, Middle East and the Caribbean as part of their study package.

For More of This and Other Stories, Grab Your Copy of the Standard Newspaper.  

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BIHC has ingeniously designed their courses to prepare the students for various positions in the industry globally, with Diploma and Certificate courses which have intakes in January, May and September. Alongside these, there are short courses in International Cookery and Pastry which run separately on weekends or weekdays throughout the year.

With all these, you are on your way to being a hospitality expert and a culinary mastermind. Besides, you could even start your own restaurant and put all those good skills to use. However, Charity begins at home, start by showing off your new skills to your family and friends. I believe you will be the chef you have always imagined to be.

Now go forth and make your dreams come true!



Do not miss out on the latest news. Join the Standard Digital Telegram channel HERE.

Boma International Hospitality CollegeBusiness and Hotel Management SchoolBIHCBHMS

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