The Kenya Union of Savings and Credit Co-operatives (KUSCCO) is set to auction properties to recover Ksh1.36 billion in unpaid loans from SACCOs that secured funding against deposits worth Ksh368 million leaving a massive shortfall of nearly Ksh988 million.
KUSCCO has since issued demand letters requiring defaulting SACCOs to submit payment or a formal repayment plan within two weeks. Failure to comply, the letters warned, would trigger auctioning of pledged assets including houses, commercial buildings and plots or worse freezing of SACCO accounts.
According to a report in one of the local dailies, one SACCO alone has defaulted Ksh377.5 million. Others in this list are well-known cooperatives and smaller outfits in Lamu, Migori, and Malindi.
KUSSCO itself has been rocked by allegations of widespread financial fraud and mismanagement. A forensic audit conducted by PricewaterhouseCoopers (PwC) revealed damning details, including falsified signature of a deceased auditor to manipulate financial reports, placing over Ksh13.3 billion in member deposits at grave risk.
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In response, the Sacco Societies Regulatory Authority (SASRA) blamed outdated policies and regulatory gaps for enabling KUSCCO’s prolonged misconduct. SASRA estimates that SACCO members have lost Ksh14 billion and says this could have been avoided had reforms been implemented earlier. As of now, 201 SACCOs have seen a loss of 10 per cent of their core capital.
As part of a government-endorsed recovery strategy, in May 2025 KUSCCO initiated property auctions including plots, houses and commercial buildings, which had been pledged as collateral by the defaulting SACCOs aimed at reimbursing affected SACCOs. .
In an initiative toward restoring confidence in the sector and safeguarding future cooperative investments, the government through the Cabinet Secretary of Co-operatives and Micro, Small and Medium Enterprises (MSMEs) Development, Wycliffe Oparanya announced the formation of a five-member Committee of Experts to review the outdated SACCO Societies Act of 2008
By Masaki Enock
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