Unlocking potential of unclaimed or abandoned assets

Almost daily, for the past 10 years, as I come to the office and going home -- I pass a property (a beautiful two-floor house) seem to have been abandoned by its owner(s), or to the best of my guess – the owner may be a deceased fellow whose next of kin does not know there is beautiful property in that Ununio Street left unattended by their “passed-away relative”, outside the house there is a car nearly destroyed by the constant rainy and sunny weather plus the effect of a house built in the swamp area. During these past 10 years, as I pass this house, I (albeit unconsciously nowadays) have always said to myself -- how many such properties, monies, shares, bonds, dividends and interests, etc, that remain idle, abandoned and unclaimed in this country? which could better be converted into investable productive assets? I know the answer to my “how many?’ question calls for improbable responses – but the spirit to it is that there is need for raising consciousness, development of a policy, creating the necessary legislative framework/environment as well as ensuring there are instruments and the infrastructure to enable us unlock the potential buried in such unclaimed assets or abandoned properties.

As we contemplate this, we may wish to appreciate the extent of such unclaimed assets or abandoned properties may be significant – I have recently read the situation in Kenya. In Kenya, where there is already a legal framework (i.e. Unclaimed Financial Assets Act) as well the Institutional infrastructure (i.e. the Unclaimed Financial Assets Authority (UFAA)) to address this issue. The UFAA has recently published its past financial statements ending June 2017, as at that date, the authority held Ksh8.5 billion (equivalent to Tsh170 billion) in unclaimed assets mainly received from banks, Saccos and insurance companies; while the amount held in trust for listed shares was valued at Ksh16.4 billion (equivalent to Tsh330 billion), these being shares held in trust pending the transfer of title to the UFAA. This is a whopping total of Tsh500 billion of unclaimed financial assets, excluding other assets classes such as properties. I have not come across statistics here at home that gives us a glimpse of the size of unclaimed financial and other assets or abandoned properties – probably there might be the need for commissioning a survey to work on this revelation.

What is the argument? – the argument is, each year billions of shillings in dormant or lost bank and investment accounts (either with banks, or the stock exchanges’ brokers, or insurance companies or listed companies, etc) go unclaimed, renders them not effectively used as productive assets within the economy. In other places, such unclaimed financial assets or abandoned property will put be under the government’s authority, either a division within Treasury/Ministry of Finance or a separate regulatory agency responsible for holding in custody and safeguarding those assets until the rightful or until claimants come forward or are located. While under the government custodian, and as efforts are being made (with no cost to the owner), to reunite rightful owners or heirs with their unclaimed assets, which is remitted to the government authority by some of the above mentioned entities after the business loses contact with a rightful owner, for a period of a prescribed number of years – such assets could be legally and formally used as investments in productive activities within the economy, and in the process creating jobs, earnings the government more revenues, enhancing liquidity within the economy, increasing the country’s gross domestic products, etc.