Cabinet Secretary for Co‑operatives and MSMEs Development Wycliffe Oparanya has disclosed that the Kenya Union of Savings and Credit Cooperatives (KUSCCO) is grappling with a financial deficit of nearly Ksh12 billion, a crisis uncovered through a forensic audit that revealed years of misreported profits. The revelation comes as the government intensifies reforms aimed at restoring confidence in the SACCO sector and safeguarding millions of members from systemic risks.
Appearing before the Senate Standing Committee on Trade, Industrialisation and Tourism at Bunge Tower on Tuesday, May 12, 2026, chaired by Sen. Issa Boy Juma, Oparanya, accompanied by Principal Secretary Patrick Kilemi, briefed senators on the recovery of misappropriated funds at KUSCCO, the status of Metropolitan National SACCO, and ongoing reforms within the cooperative movement.
Oparanya told the committee that KUSCCO had long reported profits despite incurring heavy losses. A forensic audit and account reconstruction conducted by PwC between August and November 2024 established that the union’s books had been overstated, resulting in a deficit of approximately KSh 12 billion.
“A forensic audit and subsequent reconstruction of accounts revealed that while the Union had been reporting profits, it was in fact incurring substantial losses,” he said.
The CS warned that the crisis had undermined liquidity among member SACCOs and eroded confidence in the wider cooperative movement. “This situation has had a direct and adverse impact on the liquidity position and confidence of member SACCOs, thereby posing a systemic risk to the broader cooperative movement in Kenya,” he added.
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To address the crisis, Oparanya said the ministry had initiated forensic audits, debt recovery programmes, restructuring of operations, and legal action against individuals adversely mentioned in the audit findings.
The report was also submitted to the Inspector General of Police to support ongoing multi‑agency investigations. So far, more than KSh 369 million has been refunded to SACCOs and members through property auctions, vehicle sales, and debt collection initiatives during the 2024–2025 period.
Despite these recoveries, he acknowledged that challenges remain, including the historical deficit, delayed recoveries, ongoing court cases, and a KSh 1.2 billion tax dispute with the Kenya Revenue Authority.
Oparanya also updated senators on Metropolitan National SACCO, noting that investigations by the Directorate of Criminal Investigations and related judicial processes are still underway, with surcharges issued against affected parties and matters before the Co‑operative Tribunal being pursued.
Oparanya underscored that the ministry is advancing reforms anchored in Sessional Paper No. 4 of 2020 on the National Co‑operative Policy and the Co‑operatives Bill, 2024. These reforms include strengthening SASRA, enhancing member protection, and introducing new safeguards such as a SACCO Deposit Guarantee Fund, a Central Liquidity Facility, a Shared Services Platform, a SACCO Stabilization Fund, and a digital cooperative registry.
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“The reforms are intended to build a stronger, safer, better‑governed and more competitive cooperative sector that protects members and contributes to Kenya’s socio‑economic transformation,” he said.
Members of the Senate committee urged the government to fast‑track the Cooperative Bill currently before the House, noting that the legislation would strengthen oversight, governance, and accountability in SACCOs and cooperative societies.
Senators also called for the establishment of a mediation committee to build consensus and speed up the enactment process as the government seeks to restore confidence in the cooperative movement.
By Masaki Enock
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