Ushuru Savings and Credit Co-operative Society has written off Sh5 million tied to its investment in the troubled Kenya Union of Savings and Credit Co-operatives (KUSCCO), underscoring growing risks in the cooperative sector.
The impairment, disclosed in Sacco’s latest annual report, reduced the value of its KUSCCO shares from Sh15 million to Sh10 million. The Sacco also booked a Sh5 million impairment charge, which weighed on its earnings during the year.
Despite the setback, Ushuru Sacco reported a strong financial performance, posting a net surplus of Sh182.6 million for the year ended December 2025, up from Sh128.8 million in the previous year. Growth was driven by robust interest income from loans, which rose to Sh752 million, alongside improved credit quality that allowed for a reversal of loan impairment charges.
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The exposure to KUSCCO, however, highlights broader vulnerabilities within Kenya’s cooperative movement. Saccos typically pool funds into umbrella bodies such as KUSCCO for investment and liquidity support, but recent financial troubles have cast doubt on the safety of these investments. Ushuru Sacco has also made provisions on other KUSCCO-linked exposures, including savings held in the Central Finance Fund, signalling a more cautious approach to risk management.
The come at a time when regulators are tightening oversight of the cooperative sector, pushing for stronger governance, transparency, and accountability. A forensic audit conducted by PricewaterhouseCoopers last year revealed that about Sh13.3 billion had been lost through fraud, embezzlement, and mismanagement, while Sh24.8 billion in Sacco deposits were flagged as being at risk.
By Masaki Enock
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