State upholds liquidation of Moi University Sacco, cites legal constraints

The government has confirmed that the liquidation of the Moi University Savings and Credit Society (MUSCO) will proceed, despite protests and lobbying efforts by its members and local leaders.

This decision, announced by Cooperative and MSME Development Cabinet Secretary Wycliffe Oparanya, follows a legal assessment that found no grounds for reversing the Sacco’s cancellation.

Appearing before the Senate, CS Oparanya clarified that Kenya’s current legal framework does not permit the reinstatement of a cooperative society once its registration has been revoked. He stated, “In the current legal framework, once a Sacco’s registration is revoked and no appeal is made within 30 days, liquidation proceeds as stipulated.” This position is further supported by the Kenya Insolvency Act and aligns with international best practices.

MUSCO’s troubles began after it accumulated debts exceeding Ksh1 billion, leading to the revocation of its license in 2018. The Sacco eventually collapsed due to alleged mismanagement and a high number of non-performing loans.

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While acknowledging the concerns of the over 3,000 affected members, Oparanya explained that the delay in resolving the issue was a result of the need to ensure a legally correct path forward.

However, Oparanya noted that the Ministry is developing a framework to engage with MUSCO members and other stakeholders to address their welfare and explore possible solutions for the future.

To improve the liquidation process, Oparanya announced several new measures including the appointment of a new liquidator, the fast-tracking of audits for previous financial years, and the implementation of enhanced oversight mechanisms.

These measures aim to bring integrity and efficiency to the process, even as the government maintains its firm stance on the Sacco’s permanent closure.

By Masaki Enock

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