- KUSCCO members accuse the Government of failing to recover billions in lost funds.
- An audit found the union insolvent, with liabilities far exceeding its assets.
- Nearly 300 court cases are piling pressure on KUSCCO as recovery efforts stall.
Enraged members of the Kenya Union of Savings and Credit Co-operatives (KUSCCO) have accused the Government of complicity in the mismanagement of the union and indecisiveness in recovering billions of shillings they claim have been lost.
The concerns emerged during a day-long Special General Meeting held at All Saints Cathedral, where representatives of about 250 affiliated Saccos met to review the union’s financial position and chart the way forward.
The meeting was characterised by bitter exchanges between Sacco representatives and Commissioner for Co-operatives Development David Obonyo, with members demanding urgent action to recover their resources.
Obonyo defended the Government’s intervention, saying tough measures had already been taken, including the dissolution of the previous board and prosecution of some of its members.
“The institution is insolvent and cannot even meet its financial obligations. Therefore, it requires drastic measures to save stakeholders’ hard-earned assets. It has proved difficult to recover the lost money, and therefore we have to collectively agree on the best approach to ensure shareholders do not lose everything,” Obonyo said.
The KUSCCO board was dissolved in May 2024 by former Co-operatives and Micro, Small and Medium Enterprises Development Cabinet Secretary Simon Chelugui, who appointed an interim board tasked with overseeing the transition and facilitating the recovery of members’ savings.
Audit reveals insolvency and poor record-keeping
An audit conducted by Grant Thornton, which was appointed by the Government to examine KUSCCO’s financial affairs, found the institution insolvent and facing severe financial challenges.
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The audit revealed that there was no asset register and insufficient supporting documentation for the loan book. The union was reported to require about Ksh14 billion to restore its operations, against liabilities of Ksh17 billion and an asset base estimated at Ksh5.4 billion.
The union’s legal team, led by Cecil Miller, managing partner at Miller and Company Advocates, reported that KUSCCO was facing nearly 300 court cases filed by Saccos seeking repayment of more than Ksh16 billion invested over the years. A progress report showed that between 2024 and 2026, only Ksh77 million had been recovered from debtors.
Miller said the union was expected to respond to 291 cases as of August 28, 2026, with petitioners demanding speedy payment of their deposits and accrued interest. The continuing litigation was said to have slowed efforts to recover debts owed by Saccos and individuals.
Arbitration proposal rejected
A proposal by Hazina Sacco chairman Evans Kibagendi to have the KUSCCO dispute referred to arbitration was rejected by Miller, who said the move could complicate the situation and expose the union to additional litigation.
“If the Saccos continue filling more court cases, the union risks being taken over by the Cooperative Bank which is the main lender, thus complicating shareholders’ efforts to recover their assets. The only option remaining is for the Commissioner of Cooperatives to exercise his powers as stipulated in the Cooperatives Societies Act to save the shareholders from total loss of their hard-earned resources,” Miller said.
Negative growth across key segments
Further financial assessments showed that KUSCCO’s key business segments had recorded negative growth over the years. The union was reported to have registered negative retained earnings of Ksh16.8 billion, while expenses amounting to Ksh13 billion lacked adequate supporting evidence.
The financial crisis has intensified calls for a decisive restructuring process to protect shareholders and facilitate settlement of the union’s outstanding obligations.
By Bernard Magada
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