A massive nine out of every 10 of the Sh65 billion unclaimed assets, including cash shares and dividends, are worth below Sh1,000, piling pressure on the Unclaimed Financial Assets Authority (UFAA) to lower the cost of reunifying the properties with their owners.
Auditor-General Nancy Gathungu revealed that 17.7 million of the 20 million idle assets in the books of UFAA, or 88.5 percent as of the financial year ended June 2024, are worth sums below Sh1,000.
Cash sums below Sh100 formed the bulk of the idle asset records forwarded to the UFAA, with 61.5 percent or 12,318,000 falling under this category.
The Auditor-General said that holders of small amounts were forced to incur high costs, such as travel expenses and certification fees, when claiming the money from the agency. This resulted in most of them forgoing the money.
All claimants are required to present claim forms duly commissioned along with certified copies of the national identity card and the Kenya Revenue Authority PIN certificate. The cost of certifying the documents is an average of Sh500.
Claimants are also required to physically visit the office of the unclaimed asset holder to obtain an official letter, increasing the time and cost involved in lodging the claims.
“Due to the non-differentiated nature of the claim process, apparent owners of unclaimed financial assets that were relatively low in value incurred the same cost as high-value claimants. Consequently, fewer claims were lodged, leading to a low reunification rate,” reads the report by the Auditor-General.
The National Treasury was cited for failing to implement proposals by UFAA to simplify the claims process. The agency had proposed the use of a single standardised form to be signed by the claimant without certification by a judicial officer or legal practitioner.
The small amounts accumulated to form a huge sum, with the authority previously disclosing that assets worth less than Sh5,000 totalled Sh43 billion.
These small amounts have been attributed to people forgetting their bank accounts, ignorance, relocation, and death.
Mobile money has also been cited for the small records, as dormant accounts are passed on to new users.
On the upper side, 2,000 records worth between Sh500,000 and Sh750,000 were submitted to the authority. Records worth more than Sh100,000 but below Sh500,000 were 22,000.
The auditor general urged UFAA to make use of Huduma Centres to decentralise its services and increase the rate of reunification with rightful owners of assets.
“The audit established that the authority intended to deploy their staff in the Huduma Centres, although they had yet to recruit the required staff. This contributed to the low number of claims lodged and ultimately the low reunification rate,” said Ms Gathungu.
As of August 2024, the authority had received Sh65 billion from holders of unclaimed assets, with four percent of the assets reunified with their rightful owners.
Assets are considered unclaimed if they are dormant for a long period. The period differs between asset classes; for example, dormant bank accounts become unclaimed after five years, while utility deposits such as water and electricity are marked unclaimed two years from the date service is terminated.
