The SACCO society’s regulatory authority (SASRA) has issued a stern warning to cooperatives that mismanage members’ funds, stating that their days are numbered. Jack Ranguma, the Chairman of the SACCO Societies Regulatory Authority (SASRA), particularly singled out Metropolitan National SACCO, noting that its members have lost millions of shillings.
Ranguma revealed that the minister responsible for SACCO affairs, Wycliffe Oparanya, has been briefed about the ongoing issues at the SACCO. His comments followed concerns raised by former members of the SACCO, which has since collapsed. Ranguma assured the public that the relevant government investigative agencies are addressing the situation.
It has emerged that over 100,000 members lost a staggering Ksh 15 billion in savings between 2021 and 2023. The financial catastrophe has left many members, mostly teachers and civil servants, in distress, with no clear resolution in sight.
An audit conducted into the SACCO’s operations uncovered that Ksh 12 billion was either stolen or embezzled through a complex network involving both past and present senior staff members and board directors. The scandal first surfaced three years ago after complaints from members began to mount. In April 2022, a special audit team was appointed to investigate the SACCO’s operations, revealing shocking levels of theft and embezzlement. Despite the findings, no one has been prosecuted, and the stolen sums and assets remain unrecovered.
Among the most glaring revelations was the case of Ksh 49 million illegally withdrawn by a teller at the Nakuru branch, exposing just one of the many gaps in the SACCO’s financial controls. Additionally, Ksh 7 billion was loaned out to fake members, raising questions about the integrity of the SACCO’s loan issuance procedures.
The audit also revealed that the SACCO’s directors had authorized the payment of dividends and rebates using members’ cash deposits rather than profits. This practice artificially inflated the SACCO’s balance sheet from Ksh 14 billion to a deceptive Ksh 28 billion. These financial manipulations masked the true state of the SACCO’s finances, leaving it vulnerable to large-scale fraud.
Further irregularities included Ksh 490 million in loans disbursed to SACCO employees under questionable circumstances, and Ksh 176.9 million that disappeared from the Kisumu, Thika, and Kiambu branches. The scale of these losses has shaken the confidence of SACCO members, many of whom fear they may never see their savings again.
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The scandal’s reach extends deep into the SACCO’s history. Originally established in 1977 as Kiambu Teachers SACCO, it later rebranded as Metropolitan Teachers SACCO before adopting its current name, Metropolitan National SACCO Society Limited, in 2009. Over the years, the SACCO expanded its membership beyond teachers to include all salaried individuals, businesses, commissions, and even minors. However, this growth has been overshadowed by the current crisis, which threatens to undo decades of progress.
The SACCO’s interim board, which met on Thursday, August 15, has called on government agencies, including the Directorate of Criminal Investigations (DCI), to expedite their probe and recover as much of the stolen funds as possible.
“If the loan book was reported to be Ksh 17 billion, and now we have Ksh 1 billion, it means the money that we are operating with today, the money that we are giving services with today, is current money,” the current leadership said, acknowledging the seriousness of the situation while trying to reassure members.
In Kisumu, frustrated members complained about losing as much as Ksh 500,000 and urged the government to intervene. A teacher who was a former member of the organization stated that they have been unable to locate the management of the firm.
By Fredrick Odiero.
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