Kenya Has Turned Its Citizens’ Lost Money Into a Fund

Kenya expects to finance a KSh1.116tn deficit in the year to June 2027. Its three most recent dollar-bond issues carry coupons of between 8.25 and 9.75 per cent. Yet in February, Treasury principal secretary Chris Kiptoo said the Unclaimed Financial Assets Authority, UFAA, had KSh57bn invested in government securities, while a further 1.85bn unclaimed shares in listed Kenyan companies had been valued at KSh67.16bn three months earlier.

Every Finance Bill makes taxation a political argument. Kenya’s previous IMF arrangements expired in April 2025 after it requested talks on a successor. Meanwhile, a growing financial estate has waited for citizens to prove it is theirs.

These figures do not describe one pot of spendable state cash. The securities figure has not yet appeared in an audited annual account, while the shares are a fluctuating market valuation and remain with issuers and registrars. Together they establish the scale: well over KSh100bn across separate categories of cash investments and quoted equity is linked to owners who have fallen out of contact with formal finance.

This is not a scandal in the conventional Kenyan sense. The Auditor-General issued unmodified opinions on the Authority’s and Trust Fund’s FY2024/25 statements, meaning they were fairly presented in all material respects, not that every asset or control was sound. When allegations of a KSh10.5bn hole circulated in 2024, UFAA said they confused assets identified during audits of holders with assets remitted into its custody. The 2025 accounts separately disclose KSh10.79bn identified through holder audits as unremitted, disputed or under enforcement. That is not the same as a loss from the Trust Fund.

The harder charge is architectural. Parliament created UFAA to receive, safeguard and reunite dormant property with its owners. It is good at the first two verbs and weak at the third. Cash comes in, investment income compounds, the authority’s operations are funded, and government paper finds a buyer. The owner must discover the asset, reconstruct the documents and prove the relationship. Kenya calls this custody. Whether the system behaves like custody tests whether the state understands the difference between keeping property and returning it.

Part I · The Architecture of Dormancy

The cleanest starting point is the last audited balance sheet. At 30 June 2025, the Unclaimed Financial Assets Trust Fund held assets of KSh52.18bn. Treasury bills accounted for KSh27.92bn and Treasury bonds for KSh21.90bn, giving a government-securities portfolio of KSh49.82bn. Cash and cash equivalents stood at KSh1.02bn and accrued interest at KSh1.34bn. Within the Fund’s capital, KSh33.82bn represented unclaimed cash principal and KSh17.39bn a revenue reserve generated largely from investing it. During the year, holders surrendered a further KSh4.77bn in cash, 22 per cent more than in the previous year. The Fund earned KSh6.48bn from investments, an increase of 37 per cent. It paid KSh427.5mn in cash claims to 5,014 claimants.

The Auditor-General described the year’s cash payments as about 1 per cent of the opening stock and new receipts. That is not a cumulative rate. The longer performance audit reported an average reunification rate of 4 per cent across asset categories for the six years to June 2024. UFAA’s February 2026 account said it had mobilised KSh40.7bn in cash over more than a decade and paid KSh2.84bn to 39,203 claimants. A simple ratio of those agency-reported cumulative figures is about KSh14 entering for every KSh1 paid out. Different cut-offs and definitions prevent exact comparison.

The direction is unmistakable: acquisition is outrunning restitution.

Cash is only the part that fits neatly on a balance sheet. At June 2025, 1.87bn unclaimed shares had been reported to UFAA but not delivered into a central custody arrangement. At a different cut-off in November, UFAA data reported by the *Business Daily* counted 1.85bn shares in 47 Nairobi Securities Exchange companies, valued at KSh67.16bn. Safaricom accounted for 705.46mn shares then worth KSh20.28bn; KCB for 190.1mn worth KSh11.16bn; Co-operative Bank for 150.6mn worth KSh3.45bn. These are different reporting snapshots, not evidence of a decline, and the values fluctuate. There were also 3,909 reported safe-deposit boxes awaiting transfer at the financial year-end, as well as unit trusts and other property.

The Unclaimed Financial Assets Act of 2011 turns ordinary inactivity into this extraordinary estate. A cheque generally becomes unclaimed after two years; a bank deposit after five; a life-policy benefit after two years from the date it became payable; shares and distributions after three; unpaid wages after one; and the contents of a safe-deposit box after two years from expiry of the lease. Section 19 requires a holder to make reasonable efforts to find the apparent owner and, where an address exists, to send written notice between 60 days and one year before reporting. Under sections 20 and 22, holders report annually and deliver the asset. Under section 23, UFAA assumes custody and responsibility. The owner’s claim does not expire.

The legal sequence appears reasonable until it meets the data. Of roughly 20mn records examined by the Auditor-General, 12.32mn, or 61.6 per cent, were worth no more than KSh100. Fully 81.6 per cent were below KSh500. The audit found KSh307.9mn associated with labels such as “Not Known”, “No Name”, “Null” and “NA”. Reporting templates omitted telephone numbers and email addresses and did not capture key identifiers consistently. Dormancy is not simply a morality tale about careless citizens. It is the product of institutions that opened accounts, sold policies and accepted deposits without building a durable route back to the human being.

Part II · The Institution

UFAA was established by the 2011 Act and began receiving assets in 2014. Section 40 provides for five appointed non-public members with prescribed professional or consumer expertise, who elect a chair, alongside the Treasury principal secretary and the chief executive. CPA Laban Molonko, previously chief financial officer of Access Bank Kenya, became chief executive in October 2025. The institution he inherited is smaller than its balance sheet suggests. The performance audit reported 29 staff against an approved 112, including three compliance auditors against an approved 12. Its operational revenue in FY2024/25 was KSh583mn.

The most revealing feature of that income is its source. UFAA reported no Exchequer grant. KSh525.9mn came from a Trust Fund allocation approved under the statutory framework; another KSh53.9mn came from bank interest. This is lawful. Section 44 allows approved administrative expenses and section 48 permits trustee investments. The arrangement creates a potential conflict of incentives: the corpus supports the organisation charged with paying validated claims against it.

The owner is protected in one sense and exposed in another. UFAA is a custodian, not the beneficial owner. The right to reclaim persists. Yet section 45 entitles the claimant to the nominal amount surrendered and expressly denies interest accruing after payment to the authority. In the year to June 2025, the Fund earned KSh6.48bn from assets whose owners received no corresponding return after surrender. Part of that income financed the custodian; most enlarged the revenue reserve. An owner of KSh10,000 transferred years ago still has a legal claim to KSh10,000, but inflation has reduced what that claim can buy. Permanent title without preserved value is a thin form of ownership.

The claim that government has simply “taken” the money is inaccurate. The Fund buys Treasury securities. Government owes the Fund, which remains statutorily obliged to pay validated owners. The transaction is recorded, audited and lawful, and the June 2025 accounts received an unmodified opinion. What remains unsettled is the liquidity required for future claims, whether owners should share investment returns, and whether an authority funded from the float has a strong enough performance counterweight. Audited aggregate accounts show collections and investments. It is harder to see owners traced, claims defeated by documentation, median days to payment or real value lost before reunion.

The recurring controversy over “missing” assets should therefore be handled with care. UFAA’s June 2025 schedule recorded KSh10.79bn in cash and 425.68mn share units identified through compliance audits but not remitted, including amounts disputed or under enforcement. They are not evidence that money disappeared from the Fund. The documented failure is more prosaic and durable: unmodified financial-statement opinions, a large portfolio and an owner-return mechanism too weak to alter the direction of the balance sheet.

Part III · Why Reunification Fails

For an owner, the system begins with discovery. UFAA now offers a search through *361#, its website, eCitizen and Huduma Centres. In February 2026 it extended claims assistance to all 59 Huduma Centres after a pilot in five Nairobi locations, and said it had revamped its management system to support online claims and a holder portal. That is a substantive correction to a weakness identified during the Auditor-General’s 2024 fieldwork, when physical access was still concentrated in Nairobi. It is also only the first step. Finding a record is not the same as satisfying the law of proof.

An original owner generally submits Form 4A, an advocate-commissioned indemnity, a confirmation letter from the original holder, a certified ID or passport, a KRA PIN certificate and payment details. A name mismatch can require an affidavit. A beneficiary adds a death certificate, the deceased’s identity and a confirmed grant or certificate of summary administration; all administrators sign. A 30-day no-objection notice follows in the *Kenya Gazette*, UFAA’s website and at least two widely circulated newspapers, even where succession has already involved public notice. The safeguards deter fraud but place almost every evidential burden on the person least likely to hold the original record.

The estate of Peter Charles Nderito shows what that burden looks like. His daughter, Angela Wambui Nderito, went to the High Court seeking access to about KSh200,000 in Standard Chartered dividend cheques transferred to UFAA, saying she needed the money for medical and rental expenses. The record stated that UFAA would not release the funds until confirmation of the grant. In 2021, the court struck out her duplicative application; the underlying grant remained unconfirmed. The decision does not establish misconduct by UFAA. It shows how a modest sum can remain beyond the reach of an administrator because unclaimed-property administration inherits the full weight of probate.

There are successful cases. In Bungoma, Gregory Wekesa and his family began pursuing money belonging to their late father in 2020. According to a 2023 media account, UFAA engaged after the forms were submitted and payment thereafter “did not take long”. A *Kenya Gazette* notice appears to corroborate the beneficiary claim, although it records a variation in the spelling of the deceased’s name. The case proves that the system can work. It also illustrates the prerequisites: awareness, persistence, a traceable holder, succession standing and paperwork capable of surviving a name discrepancy.

UFAA’s service standards are 30 days for a fully supported original-owner claim and 90 days for a beneficiary claim. The qualifying phrase does considerable work. In the 2022–2024 claim register, 50 per cent of 7,598 original-owner claims exceeded 30 days. Among 2,527 secondary claims, comprising beneficiary and agent claims, 65 per cent exceeded 90 days. No public rejection rate or reasons taxonomy could be located in the authority’s service material, financial reports or the performance audit. Delay, incompleteness and refusal are different outcomes; a credible system should report each separately.

For tiny balances, the procedure becomes irrational. The audit estimated that commissioning or certification alone could cost about KSh500, before travel, yet nearly two-thirds of records were KSh100 or less. UFAA proposed a simplified claim in December 2022 using a standard form, an adult witness and an identity document. Treasury had not approved it by the audit.

> A system demanding KSh500 of formality to restore KSh100 prices the claimant out while preserving the liability on paper.

Part IV · The Holders

The largest cash pipeline is unsurprising. At June 2025, cumulative unclaimed cash principal comprised KSh24.58bn from commercial banks, KSh4.40bn from listed companies, KSh3.08bn from insurers, KSh1.38bn from telecommunications companies and KSh273.3mn from savings and credit co-operatives. Economic Survey data reported in 2026 similarly put banks at about 70 per cent of the 2025 surrender flow. No current institution-by-institution public league table was located showing amounts due, reported, remitted, reunited at source, disputed and penalised. Historical company figures and audit samples are not a national ranking.

UFAA estimated a potential holder universe of 477,112 organisations. The maximum voluntarily remitting in any audited year was 644. Across 134 compliance audits, the authority had identified KSh13.43bn by March 2025. Only 8.4 per cent had been reunited at source and 13.9 per cent remitted; 75.6 per cent remained unremitted. Ninety-four audits were open. A 20-entity sample found KSh5.09bn in assets and KSh2.23bn in assessed penalties, including KSh2.32bn at the University of Nairobi, KSh1.46bn at CIC and KSh286.5mn at Equity Bank. These are audit findings, some contested, not a national ranking.

Section 33 provides interest, daily penalties of KSh7,000 to KSh50,000 for wilful failures, and 25 per cent of the asset for wilful failure to deliver. Amendments cap combined statutory interest and penalties at the asset’s value and created a time-limited 12-month voluntary-disclosure programme. Yet the audit reproduced legacy or open assessments, some calculated above the cap introduced in 2022; their current enforceable amount was not established. In the 20-entity sample, assessed penalties exceeded half the assets in 15 cases. Carbacid’s sampled report showed KSh30.9mn against KSh1.08mn in assets. The Auditor-General concluded that heavy penalties discouraged remittance and closure of audits.

Two High Court cases reveal the problem. UFAA demanded KSh138.25mn in assets and KSh3.93mn in audit fees from AIG Kenya; the underlying audit had assessed KSh312.79mn in penalties and interest. The court quashed the audit and demand because management comments had not been addressed, while upholding the statutory audit power and allowing a properly conducted fresh audit. A separate Britam audit, involving KSh56.48mn, more than 21mn shares and KSh79.79mn in penalties, was also quashed for procedural impropriety. That ruling did not decide whether Britam held the assets. Neither company was cleared on the substance.

Holders may retain custody, and potentially the economic use, of dormant cash until surrender. The performance audit found refundable deposits being used in some public universities’ operations. Shares remain with original holders because UFAA lacks a CDSC account, creating a risk around custody and corporate actions. Holders retain statutory notice, reporting and record-keeping duties, but there is no public holder-level tracing and reunification scorecard. A compliance regime should make the holder’s effort as measurable as the claimant’s paperwork.

Part V · The Comparative Frame

The useful comparison is how different systems allocate the work of finding the owner, protect the value of the claim and constrain the use of the float.

The United States offers a decentralised but proactive model. Most state programmes participate in MissingMoney, a free federated search sponsored by the National Association of Unclaimed Property Administrators, which says owners may reclaim in perpetuity. Illinois’s Enhanced Money Match compares simple records with state-held names and addresses, contacts the likely owner and sends a cheque without a claim where the match is unique and low risk. In September 2024 it announced almost $13.2mn for 138,561 people. Complex cases remain manual. Automation need not adjudicate an estate; it can stop government demanding an affidavit when its own records establish the match.

The United Kingdom begins with a clearer hierarchy. Its Dormant Assets Scheme is voluntary, reunification comes first, and the owner retains a right to full repayment. Participating institutions continue tracing customers and verifying claims. Reclaim Fund Ltd assumes the liability, calculates and retains an actuarial reserve, and transfers only surplus to the National Lottery Community Fund for authorised social and environmental use. Scheme money is separated from ordinary central-government finance, and the Dormant Assets Act 2022 authorises Treasury lending if the reclaim fund is, or is likely to become, unable to meet its liabilities. Social use is conditional on quantified liabilities, reserves and contingent Treasury support.

Australia is more fiscally direct. Unclaimed money is transferred to the Commonwealth Consolidated Revenue Fund, yet there is no time limit for recovery. ASIC provides a free national search, while the originating institution verifies the relevant claim. Successful claims on eligible money held by ASIC receive consumer-price-index-based interest from July 2013, or a later applicable date. This partly protects post-2013 purchasing power.

India divides the problem by asset class. Dividends unclaimed for seven years move to the Investor Education and Protection Fund; shares transfer where dividends on them have remained unclaimed for seven consecutive years. Bank deposits unoperated for ten years move to the Reserve Bank of India’s Depositor Education and Awareness Fund. The originating bank pays principal and prescribed interest, then obtains reimbursement. RBI’s UDGAM portal centralises discovery but leaves verification with banks and uses a unique Unclaimed Deposit Reference Number. Its “100 Days 100 Pays” campaign directed banks to settle their top 100 deposits in every district, converting tracing into an operating target.

African peers show this is not a rich-country luxury. Ghana requires banks to contact a recorded next of kin or designated person after attempts to find the account holder fail, and provides a central search for balances remitted to the Bank of Ghana. Its separate e-money rules allocate 80 per cent of pre-transfer investment interest to the owner. Nigeria’s 2024 guidelines put ten-year balances in a central-bank trust, require free claims through originating institutions and return principal plus applicable interest. South Africa has a central retirement-benefit search. Its proposed all-sector central fund was deferred in 2024; in February 2026, Treasury said phased centralisation would begin with retirement funds, with detailed consultation still to follow.

Kenya belongs legally among permanent-liability systems. Title does not expire, and the state describes itself as trustee. Economically, however, it behaves closer to a fund that returns nominal principal: it invests the corpus, retains the earnings, finances administration from them and leaves discovery chiefly to the owner. The most useful reform is therefore a hybrid. Kenya can take automatic low-risk matching from Illinois, central discovery and source verification from India, interest and value-preservation mechanisms from Australia and Nigeria, and actuarial reserving, ring-fencing and a statutory Treasury lending facility from Britain. Copying any one regime would be less intelligent than combining the parts that answer Kenya’s failures.

Part VI · The Structural Argument

Unclaimed property is usually narrated as loose change at institutional scale. It is better understood as household wealth that missed its destination. The pool includes retirement savings, insurance proceeds, dividends, wages, bank balances, SACCO deposits and inheritances. In a country where many families have little formal savings and absorb illness, unemployment and funerals from current income, a benefit trapped behind a grant of representation is not idle money. It is household capital withheld at the moment it is most valuable.

It is also a financial-sector trust problem. Kenya’s banks, mobile-money operators and insurers have invested heavily in making entry frictionless. A customer can open a wallet remotely, borrow in seconds and receive a premium reminder automatically. The relationship becomes strangely analogue only when the institution owes the customer. Every benefit that cannot follow a changed telephone number, a deceased policyholder or a spelling variation weakens the claim that formal finance knows its customer. Know-your-customer rules should not work in only one direction.

The fiscal question is subtler than a raid on a vault. On a consolidated public balance sheet, the Trust Fund holds government debt; Treasury owes the Fund; the Fund owes owners. The portfolio supplies demand for sovereign borrowing and the Fund retains the investment return, while cash owners are repaid nominal principal without post-surrender interest. That is not free money. It is a long-tail statutory liability whose ageing, expected claim timing, liquidity coverage and real value should be disclosed with the same seriousness applied to other state obligations.

Most of all, this is a solvable data problem. Section 38 allows UFAA, subject to other written law, to seek information from public bodies. Kenya has national identity, civil registration, KRA, eCitizen, mobile-money and bank KYC records. Matching private or confidential data would require a lawful sharing basis, purpose limitation, security and data-protection oversight. Under those safeguards, a service could create privacy-protecting references, score matches and send them to the institution that knows the customer. A living owner with an uncontested small cash claim could confirm and receive it digitally. Estates, trusts and high-value cases would remain under human review.

The system must also repair data before it becomes dormant. Holders should capture verified identity, current contacts and next-of-kin or beneficiary details where the product permits, refresh them and preserve the mapping after transfer. Next-of-kin data assist tracing; they do not establish entitlement. UFAA should publish match rates and data-quality failures by holder. This would change reunification from an after-the-fact legal hunt into a lifecycle obligation shared by the bank, insurer, company, telecom operator and custodian.

Part VII · The Verdict

Kenya has begun to move. UFAA’s national Huduma rollout and online claims system lower the access barrier. The new chief executive inherited an institution with unmodified FY2024/25 financial-statement opinions but severe operational and staffing weaknesses documented by the performance audit. Treasury has convened a technical working group to write a National Policy on Unclaimed Financial Assets, promising digital reunification, stronger compliance, institutional co-ordination and legal reform. These are not cosmetic steps. They are taking place while the investment portfolio grows and the stock of unreturned principal rises through new surrenders.

An ambitious settlement starts with the principle Parliament left incomplete: the claim never expires, and its real value should not disappear. Amended rules could allow verified, single-owner small cash claims to be paid automatically or through one-page confirmation, without an advocate or holder letter. Estates would still require representative authority, but succession law could create a proportionate court or Public Trustee route and avoid duplicate notice. New statutory or agency arrangements could preserve a verification role for original institutions after surrender. UFAA should report owners proactively found, median and tail processing times, incomplete and rejected claims by reason, the age of liabilities and purchasing power lost.

Compliance should become visible. A public holder table should distinguish amounts reported, remitted, reunited at source, disputed and overdue, and penalties assessed from penalties collected. Enforcement needs enough auditors and procedures robust enough to survive judicial review. An estimated potential universe of 477,112 organisations cannot be supervised by the three compliance auditors observed by the performance audit, and penalties that impede audit closure do not help an owner get paid.

Finally, the Trust Fund should be ring-fenced around restitution. An independent actuarial cash-flow assessment should estimate claim timing and required liquidity, while accounts continue to disclose the full gross owner liability and total-asset coverage. Investment rules, costs and returns should be published. Amending section 45 could give cash claimants inflation-linked compensation or a transparent share of investment return; shares and other non-cash assets require preservation of units, distributions and market entitlements. Any future public-purpose use would need an express new statutory purpose, separation from routine Exchequer finance and contingent Treasury support, and could not extinguish the remaining gross liability. The authority should never have to choose between funding itself and reducing the balance that funds it.

The policy now being written is a precursor in the literal sense: an early sign of what Kenya believes ownership means in a digital financial state. If the country can lend instantly, tax electronically and identify citizens biometrically, it can do more than wait for a widow to find an old certificate. Returning this money is not a social programme, a stimulus measure or administrative generosity. It is the discharge of a debt. Custody is not proved by keeping the money safe. It is proved by getting it home.