In a stunning revelation that exposes the gaping chasm between Kenya’s political elite and the everyday struggles of ordinary citizens, Members of Parliament, MPs have emerged as the top defaulters in the country’s Savings and Credit Cooperative (Sacco) sector, racking up nearly Ksh1 billion in unpaid loans by the end of 2024.
According to the Sacco Societies Regulatory Authority (SASRA) Supervision Report 2024, the Parliamentarians Sacco – a financial haven for the nation’s lawmakers – recorded a staggering Ksh939.2 million in non-performing loans, equivalent to a default ratio of 29.73 percent of its total loan book.
This figure, which aligns closely with the reported Ksh1 billion thresholds when rounded amid ongoing audits, shatters the facade of fiscal responsibility peddled by these high-earning legislators.
While millions of Kenyans grapple with soaring living costs, unemployment, and the fallout from the 2024 Finance Bill protests that saw youth torch the streets over tax burdens, MPs – who pocket a monthly salary of Ksh710, 000 plus perks pushing their take-home pay beyond Ksh1 million – have left fellow Sacco members and the broader financial system exposed to their profligate borrowing and blatant disregard for repayment.
The SASRA report paints a dire picture of the Sacco industry’s health, with 109 deposit-taking Saccos breaching the mandatory five percent non-performing loans (NPL) threshold, and 64 of them – including the elite Parliamentarians outfit – soaring past the 10 percent mark.
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“This signifies serious deterioration in their loan quality and thus a threat to their compliance, performance, and sustainability,” the regulator warned, highlighting how unchecked defaults are eroding the cooperative model’s core promise of mutual trust and shared prosperity.
At the heart of this scandal is the Parliamentarians Sacco, a gilded cooperative reserved for lawmakers, their staff, and affiliates. Its average loan per member? A jaw-dropping ksh4.96 million – 45 times the industry norm – fueled by the society’s status as one of SASRA’s wealthiest entities.
Yet, with defaults now eclipsing nine figures, the Sacco’s stability hangs by a thread, potentially jeopardizing deposits from lower-tier members who view it as a safe harbor in an economy battered by inflation and currency woes.
Critics, including financial watchdogs and anti-corruption activists, are baying for accountability. “These are the same MPs who lecture us on austerity while jetting off on taxpayer-funded jaunts and inflating budgets for ghost projects,” said a prominent civic activist, in a blistering social media tirade.
“Ksh939 million defaulted? That’s not oversight; that’s organized theft from a system built by the poor for the poor.” The irony is palpable: Just last year, amid Gen Z-led uprisings against proposed tax hikes, MPs decried “economic sabotage” from protesters.
Now, their own financial sabotage threatens to ripple through the Sacco sector, where total loans outstripped deposits by Ksh76.4 billion in 2023 alone, per SASRA data.
The report’s timing couldn’t be more incendiary. Released amid whispers of an impending 2025 budget laden with fresh austerity measures, it underscores a deeper rot in Kenya’s governance.
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Broader SASRA findings reveal a sector hemorrhaging from fraud, unremitted deductions, and liquidity crunches, with over Ksh3 billion lost annually to internal graft and weak oversight.
Harsh economic headwinds in 2023 – from delayed farmer payouts to a depreciating shilling – exacerbated defaults across Saccos, but none hit as hard as the political class’s enclave.
Parliamentary leadership has been tight-lipped, with Speaker Moses Wetang’ula’s office issuing a curt statement calling the figures “preliminary and under review.”
But insiders whisper of internal probes, with some MPs allegedly leveraging political clout to stall recoveries. “It’s a billionaire’s club playing with fire,” said one anonymous Sacco board member.
“Depositors – many of them civil servants earning peanuts – are now footing the bill for luxury lifestyles gone awry.
“As Kenya hurtles toward the 2027 elections, this Sacco debacle could ignite fresh fury. With SASRA mandating NPL caps to safeguard the Ksh1 trillion-plus assets serving six million members, regulators are under pressure to wield the axe: fines, suspensions, even license revocations loom for rogue Saccos.
For MPs, the stakes are personal – and political. Will voters forgive lawmakers who preach fiscal prudence while defaulting on debts that could fund schools, hospitals, or debt relief for struggling families?
The report’s blunt verdict? The system’s on the brink. And if the elite won’t pay up, who will? In a nation where trust in institutions is as fragile as the economy itself, this Sh1 billion betrayal may just be the spark that reignites the streets.
By David Kipkorir
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