KUSCCO announces strategic measures towards financial stability

Kenya Union of Savings and Credit Cooperatives, (KUSCCO) has announces various strategic measures to support its financial stability, strengthen cash flow and improve operational efficiency.

According to the circular dated September 22, signed by the Group Managing Director Arnold Munene, and directed to all KUSCCO member SACCOs chairpersons, the union outlined various strategies which include:

Organizational Restructuring and Cost Optimization; to ensure long-term sustainability and cost efficiency, the Union has undertaken significant operational restructuring, through consolidation of twelve (12) branches into five (5) regional offices, and reduction of staff from 224 to 84 employees. “This restructuring process is still ongoing and has substantially lowered the operational costs, improved resource allocation, and positioned the Union to operate more efficiently in line with its recovery objectives.” Reads part of the circular.

The Union also revealed that, in broader restructuring program, deliberate steps have been taken to convert the illiquid assets into cash to strengthen liquidity and support settlement of obligations. “Central to this initiative is the ongoing sale of seventy (70) residential units under the Kitengela Homes project, which is expected to generate steady inflows over time. In parallel, the Union is pursuing systematic auctions of properties tied to non-performing loans, a process being undertaken in a structured and compliant manner to ensure transparency, maximize value, and accelerate recovery for the benefit of all stakeholders.” KUSCCO noted

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The Union also announced the diversification of KUSCCO Mutual Assurance Shareholding, inviting SACCOs and strategic partners to acquire part of its 60% shareholding in the assurance which is currently owned by KUSCCO, with the objective of unlocking additional capital.

The Union added that it has reconstructed its loan book to establish an accurate position and identify non-performing loans. A rigorous recovery program is underway, including the restructuring of the Central Finance Fund (CFF) and KUSCCO Housing Fund (KHF). “To recover non-performing KHF loans, the Union has commenced the auction of properties attached to defaulted loans. In addition, the Union has sought the assistance of the Ministry of Cooperatives in collecting outstanding debts from defaulting SACCOs, thereby accelerating the recovery process.”

“Financial Re-Audit and Statutory Audit: Following the reconstruction of the Union’s financial accounts, Grant Thornton audit firm has been engaged to carry out independent audit reviews to ensure transparency and accuracy. Specifically, a re-audit of the reconstructed financial statements for the years 2018–2022 is currently underway, alongside a statutory audit for the years 2023–2024. These exercises are intended to provide a clear and reliable financial position of the Union, strengthen stakeholder confidence, and align the Union’s reporting with regulatory requirements and best practices.” KUSCCO wrote.

This comes after PwC issued a circular on 19th May 2025 to all affiliated SACCOs, requesting submission of claims and supporting documentation, particularly in relation to the SACCO Special Deposits (fixed deposits) portfolio, the Union’s largest liability category.

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While most of the Union’s liabilities are already due, KUSCCO’s key assets are illiquid, as they mainly comprise real estate holdings and loan portfolios, including mortgages, which require time and structured processes to convert into cash.

In December 31, 2023, a situational assessment by PricewaterhouseCoopers (PwC) confirmed that KUSCCO is currently insolvent, with liabilities of Ksh17.7 Billion against assets valued at Ksh5.2 Billion

Once done, according to the Union, the strategy will confirm the Union’s obligations and form the basis of the restructuring plan. “Once finalized, this plan will be presented at a Special General Meeting before the end of the year, where members, depositors, and creditors, including your SACCO, will be invited to participate.”

By Juma Ndigo

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