Kenya’s Savings and Credit Cooperative Organizations (SACCOS) are staring at massive financial losses following unauthorized withdrawals totaling Ksh. 6 billion at the Kenya Union of Savings and Credit Co-operatives (KUSCCO). The scandal is set to impact thousands of depositors, with individual SACCOs suffering significant financial exposure.
Billions at Stake for Major SACCOS
- Mhasibu SACCO is set to lose over Ksh. 480 million.
- Kimisitu SACCO faces losses exceeding Ksh. 353 million.
- Law Society of Kenya (LSK) SACCO has been shortchanged by Ksh. 19 million, despite receiving a partial repayment of Ksh. 42.18 million.
- Stima Deposit Taking SACCO has written off Ksh. 108 million deposited at KUSCCO.
- Balozi SACCO Society has suffered a Ksh. 437.5 million investment loss.
The financial turmoil has shaken confidence in KUSCCO, with stakeholders raising concerns over deposit security and financial oversight within the cooperative sector.
Calls for SACCO Sector Reforms
The State Department for Cooperatives has stepped in, announcing urgent reforms to strengthen SACCO regulations and prevent similar financial mishaps in the future.
Principal Secretary for Cooperatives, Patrick Kilemi, emphasized the need for stricter oversight, stating:
“We are amending the SASRA Act of 2008 to ensure that anyone handling deposits is regulated. Our goal is to make a shilling in a SACCO as secure as a shilling in a bank. To achieve this, we must implement the same regulatory measures used in the banking sector.”
The government aims to restructure both SASRA (SACCO Societies Regulatory Authority) and KUSCCO, addressing gaps in supervision and financial stability within the sector.
What’s Next for Affected SACCOs?
Despite the crisis, Stima SACCO CEO Dr. Gamaliel Hassan remains hopeful about KUSCCO’s revival, stating:
“Discussions with KUSCCO are ongoing, and we believe in finding a way forward. We still need the advocacy to protect our members’ savings.”
However, depositors remain on edge, waiting to see whether their investments can be recovered and if KUSCCO can rebuild trust after this unprecedented financial debacle.