Several Savings and Credit Cooperative Organizations (SACCOs) in Kenya are on the brink of massive financial losses following illegal withdrawals amounting to Ksh. 6 billion at the Kenya Union of Savings and Credit Co-operative (KUSCCO). The crisis has left thousands of depositors anxious about the safety of their savings.
According to financial reports, some of the most affected SACCOs include Mhasibu SACCO, which stands to lose over Ksh. 480 million, and Kimisitu SACCO, which is expected to suffer a loss exceeding Ksh. 353 million. Members of the Law Society of Kenya SACCO will also take a hit, losing at least Ksh. 19 million, despite their efforts to terminate investments with KUSCCO. While they managed to recover Ksh. 42.18 million, KUSCCO failed to honor the balance of Ksh. 19 million.
In response to the ongoing crisis, Stima Deposit Taking SACCO has opted to write off Ksh. 108 million in deposits at KUSCCO. Similarly, Balozi SACCO Society has written off a staggering Ksh. 437.5 million investment. These decisions highlight the grim reality facing many SACCOs as they struggle to mitigate the impact of the financial losses.
Stima SACCO CEO Dr. Gamaliel Hassan remains optimistic about KUSCCO’s revival, stating, “The discussion we have with KUSCCO is important, but I think it’s an issue of provisioning, and that’s it. We are hopeful and do believe that KUSCCO will be revived, and we are leading that process to ensure that moving forward, we still need the advocacy.”
In an attempt to prevent future occurrences, the government is stepping in to restructure both KUSCCO and the SACCO Societies Regulatory Authority (SASRA). Principal Secretary for Cooperatives Patrick Kilemi has emphasized the need to strengthen SASRA’s capacity to regulate the country’s 4,000 SACCOs. He stated, “Our mantra has been that a shilling in a SACCO should be as safe as a shilling in the bank.”
While the government reassures SACCO members that they will recover some of their deposits, many depositors are left questioning whether stronger regulations could have prevented such massive losses. The crisis underscores the urgent need for tighter financial oversight and accountability within the SACCO sector.
