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Unclaimed Financial Assets in Kenya: A Decade of Slowed Reunification Efforts

Strategic Insights

— 1 min read

The reconnection process of unclaimed financial assets with their rightful owners in Kenya has been marred by slow progress, bureaucratic inefficiencies, and unfulfilled promises. Despite efforts to simplify the process, the Unclaimed Financial Assets Authority (UFAA) has only disbursed Sh2.7 billion out of Sh36.3 billion held in trust over the past decade. As a result, families continue to suffer in extreme poverty, while unclaimed assets accumulate, raising concerns about the efficacy of the current system.

Key Takeaways:

  • Only Sh2.7 billion out of Sh36.3 billion held in trust by UFAA has been disbursed over the past decade, with the reunification rate standing at 6% as of the last financial year.
  • The reconnection process involves lengthy follow-ups and bureaucratic hurdles, leading to financial losses and emotional stress for claimants, as exemplified by the experiences of Janet and Jared Kibande.
  • Despite efforts to digitize the process, the UFAA's CEO acknowledges the slow uptake of the WhatsApp Chatbot solution, citing the need for process re-engineering to improve user experience.
  • Unclaimed assets have stacked up in Kenya, with companies surrendering 407 million shares and Sh3.8 billion in cash to UFAA in the financial year ended June 2024.
  • Financial institutions have largely complied with UFAA's directives, with penalties ranging from Sh7,000 to Sh50,000 per day for non-compliance, and a 25% penalty for failure to surrender unclaimed assets.
  • The Parliament is being urged to review the law requiring claimants to obtain funds through lawyers, courts, and trustees, with Salome Kituku advocating for a digital system that reduces the role of intermediaries.
  • UFAA's CEO notes that bars to reunification include public disinterest and unresolved family disputes, which serve as significant hurdles to reuniting assets with their rightful owners.

Statistics:

  • Only 6% of unclaimed assets have been returned to their owners as of the last financial year.
  • UFAA received approximately 8,000 claims in the financial year 2023-24, averaging 667 claims per month.
  • Remitting institutions comply by remitting unclaimed financial assets on or before November, in line with the Unclaimed Financial Assets Act, 2011.
  • The number of shares remitted tripled from 150 million to 407 million in the financial year ended June 2024.
  • Penalties for non-compliance with UFAA directives range from Sh7,000 to Sh50,000 per day.

Sources:

  • "Unclaimed Financial Assets Authority" (2023-24)
  • "Unclaimed Financial Assets Act, 2011" (Kenya)
  • "The Star" (Kenyan newspaper) article (no date provided)

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