Kenyans have failed to claim Sh3.2 billion lying idle in M-Pesa wallets forcing the telecoms operator to hand over the billions to the Unclaimed Financial Assets Authority (UFAA).
The unclaimed M-Pesa deposits represent 96.3 percent of billions retrieved from dormant mobile money accounts as of 11 November 2024, says UFAA, adding that Airtel and Telkom Kenya subscribers are yet to claim Sh114.3 million and Sh7 million respectively.
Deposits in mobile wallets are deemed idle if held in phone lines that have been inactive for more than two years.
The lines are linked to dead subscribers, those who have left the country and lost SIM cards that have not been replaced.
“A deposit made by a subscriber with a utility to secure provision for services or any sum paid in advance for utility services to be furnished, that remains unclaimed by the owner for more than two years after termination of the services for which the deposit or advance payment was made shall be presumed abandoned,” reads part of the UFAA Act.
Mobile money operators (MNOs) including Safaricom, Airtel and Telkom are required to hand over idle cash in the wallets for a period defined by the law.
The operators alongside other institutions such as banks, insurance firms are required to surrender all unclaimed assets to UFAA by the first of November each year or risk penalties for non-compliance.
The law requires such companies to look for the bona fide owners of the assets or rightful successors in cases where the previous holders are dead.
But for companies like Safaricom, the sheer number of accounts and assets they are dealing with has made it difficult and costly to launch the search for the owners of the assets through conventional means such as publication of the names in local newspapers or websites.
The unclaimed M-Pesa deposits, for instance, accumulated in small amounts spread in millions of accounts with the telecom firm.
Previously, Safaricom said dependents of deceased persons can still claim the funds if they provide proof of death and an administration letter granting them powers over the deceased’s estates.
Essar, which operated under the Yu brand before exiting in 2014, had Sh2.1 million idle cash in its lines.
The firm exited the Kenyan market after failing to recoup its investment in the competitive mobile market.
Other unclaimed balances under mobile money include Branch Microfinance (Sh1,387,506.07) and Tala Mobile (Sh167,394).
Surrenders of idle assets by mobile network operators were the highest in 2024 at Sh827.7 million from Sh541.7 million in 2023.
The unclaimed assets under the mobile network operators have increased from Sh149.9 million in 2016
Unclaimed cash, shares and dividends surrendered to UFFA have crossed the Sh75 billion mark, reflecting the difficulty in reuniting the idle wealth as investors including tycoons show disinterest in reclaiming the assets. The idle assets stood at Sh75.5 billion in November, up from Sh62 billion in June, reflecting a growth of 21.7 percent.
Many Kenyans, said the authority, remain disinterested in pursuing funds legally belonging to them or their families.
Billionaire businessmen, former powerful government officials and prominent politicians are on the long list of individuals with shares worth Sh39.4 billion that have been surrendered to the Treasury, up from Sh30 billion in 2021 and Sh16.42 in 2017.
The authority reckons it had received Sh36.09 billion cash in local and foreign currencies from Sh23.2 billion in 2021.
Surrendered safe boxes that are believed to contain jewellery, title deeds, share certificates and Treasury bills rose to 3,737 units from 1, 953 in June. Over 9.87 million unit trusts whose values were not disclosed are also part of the idle assets.
The money is largely held by insurance companies, banks, pension schemes, legal firms, mobile phone money wallets and saccos.
So far, the authority has reunited less than 10 percent of the billions worth of shares and cash worth with beneficiaries, representing 1.9 percent of the unclaimed assets.
Unclaimed assets include money in bank accounts which have been dormant for more than five years, banker’s cheques not cashed and contents in safe deposit boxes unclaimed for more than two years.
Reporting and surrender of unclaimed financial assets by all holders is mandatory and is due on or before November 1 every year.
Holders are encouraged to file nil returns if applicable. The law allows Ufaa to charge any entity that fails to surrender unclaimed assets a penalty of 25 percent of the assets held.
In addition, the authority levies a penalty of between Sh7,000 and Sh50,000 for each day that the assets stayed before being submitted.
The law requires the holding company to search for the rightful owners of an asset before declaring it unclaimed and forwarding it to the UFAA.
Kenyans remain disinterested in pursuing funds legally belonging to them despite the soft economy, while in some instances inheritance fights have derailed attempts to unite the assets with the beneficiaries.
Since July, Sh4.3 billion in cash, 170.3 million shares and 79 safe deposit boxes have been transferred to Ufaa as unclaimed assets.
Some of the unclaimed assets are linked to the failure of the deceased to keep their wealth secret and the absence of Wills.
