The Kenya Union of Savings and Credit Co-operatives (KUSCCO) has officially begun disbursing refunds to SACCOs, marking the first major step in settling the Ksh6.2 billion it owes its members.
The long-awaited repayments follow a financial crisis at the union that was attributed to mismanagement and fraudulent activities under previous leadership.
Co-operatives and MSMEs Cabinet Secretary Wycliffe Oparanya announced that an initial tranche of Ksh112 million will be paid out this week.
Speaking during Annual Leaders Conference 2025 organised by KUSCCO, CS Oparanya described the refunds as the beginning of a journey toward rebuilding trust within the co-operative movement, emphasizing the government’s commitment to restoring transparency and accountability.
To raise money for compensation, KUSCCO has been liquidating non-essential assets and intensifying debt recovery from loan defaulters.
The reclaimed funds are being directed to affected SACCOs, many of which have been financially strained since the exposure of the union’s losses.
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Currently, 355 SACCOs in Kenya operate under regulation 177 deposit-taking institutions and 178 non-withdrawable “BOSA-only” SACCOs with deposits exceeding Ksh100 million.
However, a large portion of SACCOs 216 of them have assets below Ksh1 billion, making it difficult for smaller co-operatives to invest in modern ICT systems and compete with larger, more capitalized players.
To strengthen the sector, a seven-member expert team is reviewing the Sacco Societies Act (2008).
Oparanya said the reforms aim to enhance financial stability and prevent repeat governance failures like those seen at KUSCCO.
The CS raised concern that out of nearly 14,000 registered SACCOs, only about 300 operate under regulatory supervision by the Sacco Societies Regulatory Authority (SASRA).
He warned that unregulated SACCOs pose risks to members’ savings and vowed to push for broader oversight across the cooperative sector.
By Obegi Malack
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