In response to the directive, a section of SACCO managers has resorted to opaque practices to downplay the extent of the financial difficulties during the ongoing Annual General Meetings (AGMs). For instance, during recent AGMs by various SACCOs across the country, media access was intentionally restricted. Journalists were informed of the meetings only after they had concluded. Sources indicate that a few members who attempted to raise concerns about the KUSCCO scandal were swiftly silenced by security personnel deployed by management to maintain order.
The government, through Cabinet Secretary Wycliffe Oparanya, has directed all 247 registered Savings and Credit Cooperative Societies (SACCOs) to reduce dividend payouts to their members and strengthen their reserves to mitigate potential losses arising from a multi-billion-shilling fraud scandal at the Kenya Union of Savings & Credit Co-operatives (KUSCCO).
In response to the directive, a section of SACCO managers has resorted to opaque practices to downplay the extent of the financial difficulties during the ongoing Annual General Meetings (AGMs). For instance, during recent AGMs by various SACCOs across the country, media access was intentionally restricted. Journalists were informed of the meetings only after they had concluded. Sources indicate that a few members who attempted to raise concerns about the KUSCCO scandal were swiftly silenced by security personnel deployed by management to maintain order.
A senior official in the Ministry of Cooperatives and Micro, Small and Medium Enterprises Development, speaking anonymously to The Weekly Vision, revealed that the KUSCCO collapse has inflicted significant financial damage across the sector. Many SACCOs now face the daunting prospect of writing off substantial investments in the insolvent cooperative union.
The Scale of the KUSCCO Scandal
While a definitive list of affected SACCOs remains unpublished, we have compiled a preliminary roster based on credible reports and social media insights. The scandal, characterized by fraud, mismanagement, and financial irregularities perpetuated by KUSCCO’s former CEO George Otieno Ototo and its chairman George Magutu, has resulted in an estimated Ksh 13.3 billion loss. KUSCCO’s insolvency has left it with a Ksh 12.5 billion deficit, jeopardizing Ksh 24.8 billion in deposits across the sector. To avert widespread panic and potential runs on deposits, the government has refrained from releasing a comprehensive list of impacted SACCOs. However, the following organizations have been explicitly linked to the crisis through reliable sources:
SACCOs Explicitly Named in the KUSCCO Scandal
The Kenya National Police DT SACCO, boasting assets exceeding Ksh 59.8 billion, ranks as one of the largest shareholders in the Kenya Union of Savings & Credit Co-operatives (KUSCCO), holding 1,629,312 shares, equivalent to a 6.97% stake. The SACCO is among the entities affected by KUSCCO’s financial collapse, having placed its deposits within the collective billions at risk due to KUSCCO’s insolvency. The impact of the KUSCCO scandal poses a significant threat to the Kenya National Police DT SACCO’s financial stability.
Nacico SACCO Society Limited is also listed as one of the largest shareholders in the Kenya Union of Savings & Credit Co-operatives (KUSCCO), underscoring its notable stake in the cooperative union. As one of the SACCOs affected by KUSCCO’s insolvency, Nacico faces considerable financial risk stemming from the union’s collapse. The impact of this exposure places Nacico SACCO in a precarious position, with its deposits collectively at risk due to the losses from fraud and mismanagement within KUSCCO.
Mhasibu SACCO has incurred losses exceeding Ksh 480.6 million, a direct consequence of its inability to recover matured fixed deposits from KUSCCO. Mhasibu faces significant challenges arising from the union’s insolvency. The substantial financial impact of these unrecoverable deposits has prompted Mhasibu SACCO to reflect these losses in its provisions, signaling a proactive approach to addressing the fallout from the KUSCCO scandal. Mhasibu’s predicament underscores the severe repercussions for individual SACCOs, necessitating robust measures to safeguard its financial stability and member interests.
Other Affected SACCOs:
- Kimisitu SACCO
Losses: Ksh 353.95 million
Impact: Management has reduced dividends and allocated reserves to mitigate losses. - Stima SACCO
Losses: Ksh 108 million
Impact: Adjusting operations to absorb financial setbacks. - LSK SACCO (Law Society of Kenya SACCO)
Investment in KUSCCO: Ksh 61.4 million
Recovered: Ksh 42.1 million
Outstanding: Ksh 19.2 million
Impact: Pursuing legal action to recover remaining funds. - Balozi SACCO
Losses: Ksh 437 million (2024)
Impact: Among the hardest hit, revising financial statements accordingly. - Qona SACCO
Losses: Ksh 314 million (2024)
Impact: Scaling back dividends to manage losses. - Kenpipe SACCO
Losses: Ksh 149 million (2024)
Impact: Under significant financial strain. - Sheria SACCO
Losses: Ksh 146 million (2024)
Impact: Implementing adjustments to cushion the scandal’s effects. - Amref SACCO
Losses: Ksh 90 million (2024)
Impact: Reserves allocated to cover potential losses.
The Broader Financial Landscape
The 247 SACCOs collectively deposited Ksh 24.8 billion in KUSCCO, yet only 13 have been publicly identified to date. The State Department for Co-operatives has withheld a full list to prevent destabilizing mass withdrawals. The named SACCOs account for an estimated Ksh 1.6–1.8 billion in provisions for 2024—a mere fraction of the total Ksh 13.3 billion lost—indicating that many more SACCOs are likely affected but unnamed.
