- Government plans to transform KUSCCO into a federation under the proposed Cooperative Societies Bill.
- Oparanya says the reforms will strengthen governance, accountability and confidence in the Sacco sector.
- KUSCCO’s restructuring follows the Ksh13.3 billion scandal and ongoing asset recovery efforts.
The government is preparing far reaching reforms in the cooperative sector that will see the Kenya Union of Savings and Credit Co-operatives (KUSCCO) transformed into a federation. This marks a significant shift in the organisation’s role within the Savings and Credit Co-operative (Sacco) movement.
The planned changes are anchored in the proposed Cooperative Societies Bill. The government says the Bill will enhance accountability, strengthen governance, and promote sustainability across the cooperative sector.
Co-operatives Cabinet Secretary (CS) Wycliffe Oparanya announced the plans after meeting KUSCCO’s Board of Directors. He said the Ministry would soon begin consultations with Sacco leaders to prepare them for the transition before the new law takes effect.
“As we move closer to the enactment of the Bill, the Ministry will convene a series of engagements with cooperative leaders across the country to apprise them of the reforms and prepare the sector for effective implementation,” he stated.
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The consultations come as the Ministry pushes ahead with restructuring KUSCCO following last year’s Ksh13.3 billion financial scandal, which exposed widespread mismanagement at the umbrella body. The crisis placed billions of shillings belonging to Sacco members at risk. A number of cooperatives were forced to revise their financial records after writing off investments linked to the missing funds.
Following investigations into the scandal, the Ministry of Co-operatives took over KUSCCO’s operations. It is supervising the restructuring and stabilising the organisation as recovery efforts continue.
Oparanya said discussions with the board focused on measures aimed at rebuilding confidence in the cooperative movement through institutional reforms and improved operational efficiency.
“I visited KUSCCO, where I received a comprehensive briefing on restructuring the organisation to strengthen governance, improve operational efficiency, and restore confidence in the cooperative movement,” he said.
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The CS noted that the government had also made encouraging progress in recovering assets lost during the scandal.
“I was encouraged by the strides made in recovering assets to safeguard the interests of members, as well as the ongoing preparations to transition KUSCCO into a federation in line with the envisioned reforms,” Oparanya added.
Once the restructuring is complete, KUSCCO will cease operating as both a financial services provider and the umbrella organisation for Saccos. Its mandate will instead be limited to serving as a federation responsible for promoting sound governance, oversight, and best practice within the cooperative movement.
The Ministry says the reforms are intended to rebuild public confidence in the Sacco sector, while creating a stronger regulatory framework to prevent a repeat of the governance failures that led to the multi-billion-shilling scandal.
By Jonathan Mwinzi
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