What you need to know:
- Colossal sums of unclaimed money filled the coffers of banks and financial institutions as more and more people either died or “forgot” about the money they had.
- The coming into force of the unclaimed assets law was a turning point in addressing this long-standing matter.
- A cursory look at the data on the Unclaimed Financial Assets Authority (UFAA) website tells us that a mere 0.4 per cent of these funds have been claimed.
The enactment of the Unclaimed Financial Assets Act in 2011 was seen as a milestone in the quest to find the owners (and heirs) of the money and assets worth billions of shillings that had for generations been lying “idle” in dormant accounts in financial institutions.
For years, banks and other financial institutions let “inoperative” accounts accumulate in their books without lifting a finger to help contact their owners or next of kin.
Consequently, colossal sums of unclaimed money filled the coffers of these institutions as more and more people either died or “forgot” about the money they had in those institutions.
Therefore, the coming into force of the unclaimed assets law was a turning point in addressing this long-standing matter.
But five years down the line, only a tiny fraction of these funds has been released to bona fide claimants.
Indeed, a cursory look at the data on the Unclaimed Financial Assets Authority (UFAA) website tells us that a mere 0.4 per cent of these funds have been claimed.
That is, out of the Sh14 billion so far received by the Unclaimed Financial Assets Trust Fund — the entity vested with the management of the unclaimed assets — only Sh54 million has been claimed.
So, what is the problem? Why aren’t many people lodging their claims? Why aren’t banks and financial institutions releasing the funds as soon as they become dormant in their books?
If the slow pace of the release of these funds were to be blamed on, say, the Unclaimed Financial Assets Regulations, because they were only gazetted this year, what about the fact that few people know of the existence of these funds?
I think it is time financial institutions made available the information regarding accounts in their books that routinely become inoperative so that the owners (or beneficiaries) can get access to the funds.
I know this is easier said than done. These institutions are reluctant to do this — and for reasons not too hard to guess. The unclaimed funds are a lucrative source of free money for lending and other purposes.
This is the reason the unclaimed financial assets law was enacted — to enable the UFAA to, among other things, “receive, safeguard, invest and disburse unclaimed financial assets” held by financial institutions.
It is to be hoped, therefore, that financial institutions will cooperate, although the UFAA has complained that institutions are always under-reporting the unclaimed assets in their possession.
Indeed, a survey carried out by the Unclaimed Property Asset Register has revealed that banks, insurance companies, and Safaricom’s M-Pesa facility currently hold a whopping Sh200 billion of this “idle” money.
This situation calls for more to be done to ensure that these funds are speedily released to their genuine claimants in order for them to make use of them and turn their lives around and at the same time contribute to the economy. In this regard, the UFAA should be more creative.
Its current approach to information dissemination only through its website is inadequate.
Why not, for instance, collaborate with the ubiquitous Huduma Centres, which are now operating in nearly every county?
These centres offer important services that have simplified government bureaucracy and reduced the time taken to obtain certain documents.
Their integrated service delivery systems have revolutionised government services.
The UFAA should consider riding on Huduma Centres’ capacity, the one-stop-shop concept, to reach as many potential claimants of unclaimed assets as possible — if indeed that is what the authority wants to accomplish.
The government should consider amending the Unclaimed Financial Assets Act to address the issue of the non-financial assets that include land and other physical property held by financial institutions as collateral or for safe custody on behalf of their customers.
The author is a business and finance specialist and the deputy governor, Bomet County. [email protected].