The Kenya Union of Savings and Credit Cooperatives (Kuscco) has launched a massive recovery drive targeting Ksh1.7 billion worth of defaulted housing loans from 684 borrowers, in a renewed push to clean up its books and restore confidence in the cooperative sector.
The auctions, scheduled for November 6, 14, and 28, will see houses and parcels of land in areas including Kitengela, Kiserian, Kajiado, Nyayo Estate, Kisumu, Thika, Machakos, Webuye, Bungoma, Kisaju, Lukenya, and Syokimau put up for sale. This marks the second phase of property sales after Kuscco auctioned 80 properties in February.
Kuscco Managing Director Arnold Munene said the organisation is targeting to recover at least 80 per cent of the Ksh1.7 billion tied up in unpaid housing loans advanced through the Kuscco Housing Fund (KHF), a subsidiary that financed members to buy or develop homes.
“We have a non-performing portfolio of Ksh1.7 billion under Kuscco Housing Fund. This is actually from members who defaulted under the then mortgage scheme,” said Munene, adding that each case goes through a 90-day statutory demand, a 40-day final notice, and a 45-day auctioneer’s notice before sale.
The recovery process will be subject to reserve prices not lower than 75 per cent of prevailing market value, in line with legal requirements governing loan recall and disposal of secured assets.
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Launched in 2013, the housing fund was designed to help SACCO members acquire or develop residential homes, starting with projects in Kitengela before expanding to Nyanza, Western, and Coastal regions. However, the initiative later faced setbacks following financial irregularities that affected the fund’s performance.
A forensic audit by PricewaterhouseCoopers (PwC) linked Kuscco’s financial woes to irregular contractor selection, diversion of payments, and non-payment for houses, while management failed to make provisions for loan losses. The report showed that as of December 2023, KHF had an outstanding loan balance of Ksh3.93 billion owed by 1,962 members.
Kuscco’s ongoing recovery effort marks a renewed attempt to restore financial discipline and rebuild confidence in the cooperative’s housing initiatives after years of governance challenges. It also underscores the growing emphasis on risk management and accountability across the SACCO sector as regulators tighten oversight of member-funded projects.
By Mercy Kokwon
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