Nyati Deposit-Taking SACCO has taken legal action against the insolvent Kenya Union for Savings and Credit Co-operative Organization (KUSCCO), seeking to recover a sum of KSh 86,433,583.00 held by the Union as Fixed Deposits. The case, with file number Milimani JR Application N.E 035 of 2025, is currently before the High Court of Kenya in .
According to Nyati SACCO’s financial statements for the year ended December 31st, 2024, the SACCO had invested in KUSCCO Limited shares and products worth millions, held by the Union’s Central Finance Facility (CFF). At the end of 2024, the Society had contributed and invested in KUSCCO deposits totaling KSh 4,181,295.00, along with KUSCCO shares valued at KSh 690,005.00.
“Following KUSCCO’s liquidity issues, the SACCO has made a provision of 10% as directed by SASRA in accordance with the requirements of International Financial Reporting Standards (IFRS). The Society will do its best to recover the lost KUSCCO investments,” said Mr. Charles M. Mbuvi, Chairman of Nyati SACCO’s Board of Directors.
Due to financial turmoil at KUSCCO, Nyati DT SACCO is among those feeling the effects of the lost investments. As a result, the Society reduced its Dividend on Share Capital to 19%, compared to 21% paid out in 2023, while the rebates remained flat at 11.4%, compared to 11.3% in 2023.
“The Society has transferred KSh 200 million to reserves to increase its institutional capital,” said Mr. Mbuvi.
Nyati SACCO has maintained a large investment portfolio in CIC, Cooperative Bank of Kenya, and Treasury Bills, all amounting to a sum of KSh 42.1 million, up from KSh 35.8 million in 2023. In 2024, Nyati DT SACCO issued loans totaling KSh 3.3 billion, a 5.4% increase from KSh 3.7 billion. BOSA loans accounted for 63%, or KSh 2.4 billion, while FOSA loans made up 37%, or KSh 1.4 billion.
Nyati SACCO’s decision to take legal action against KUSCCO comes at a time when the High Court has ordered a forensic audit of accounts in a dispute involving Kencom SACCO and National Bank of Kenya (NBK) over a KSh 1.95 billion loan repayment. Kencom SACCO claims that NBK breached the terms and conditions of its contract by introducing illegal terms on its debt.
Several DT SACCOs are reportedly experiencing financial distress, prompting the Government to order forensic audits of these SACCOs, including Metropolitan DT SACCO, which is now insolvent.
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“The Government is implementing decisive measures to address financial mismanagement in the cooperatives sector. Individuals found culpable will be held accountable through the available legal and administrative framework,” said Mr. Wycliffe Oparanya, Cabinet Secretary for Cooperatives and MSMEs Development.
While addressing a recent stakeholders’ meeting, CS Oparanya warned that action would be taken against any cooperative leader who misappropriates or mismanages members’ funds. He added that the Government would conduct forensic audits of all troubled SACCOs to ensure that those found culpable are punished.
Mr. George Ototo, former CEO of KUSCCO, and five others are accused of causing the financial turmoil that has impacted the giant Union.
By Okoth Jackson.
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