The government has taken new steps to revive Moi University Savings and Credit Cooperative (MUSCO), years after it collapsed due to poor management, huge debts, and loss of member trust.
Appearing before the Senate on Wednesday, August 6, 2025, Co-operatives and MSMEs Development Cabinet Secretary Wycliffe Oparanya said the ministry had introduced a new Co-operative Bill to fix issues raised by the crisis at MUSCO.
“The Ministry has introduced a Co-operative Bill that is before you. This Co-operative Bill is supposed to address some of the governing issues that arose in the Moi University Sacco,” he said.
Oparanya added that the Sacco Act of 2008 is also being reviewed. A team of experts has been appointed to look into the law and propose changes that will strengthen regulation in the sector.
“The Ministry is also revisiting the Sacco Act, and it has appointed a committee of experts to look at the entire Sacco Act of 2008 so that the weak links of that Act are addressed, especially making the Societies Regulatory Authority (SASRA) a strong institution because it lacks capacity, so it can supervise all saccos,” he added.
Administratively, Oparanya said his ministry had already issued new directives to help prevent similar failures in future. These include orders that Saccos stop investing in non-core businesses and that all borrowing be approved by the Commission of Cooperatives.
“We have also issued circulars to ensure that any borrowing must be approved by the Commission of Cooperatives,” Oparanya said.
He added that Saccos must now have their books audited every year, and better internal controls are being enforced.
“We have improved oversight by making sure that members work within delicate systems, so we have fewer people ruling the ATMs, so they can transact their businesses,” the CS explained.
On MUSCO specifically, the CS said he had removed the previous liquidator and appointed a new one to work alongside another liquidator named by the county government.
“What I have done for Moi University Sacco is, I have removed the liquidator who was there. I have appointed a new one who will work with another liquidator appointed by the county government. Before the end of this month, I am going to meet all stakeholders of the Sacco to make sure we come up with a revival strategy,” Oparanya said.
MUSCO crisis
Moi University Sacco collapsed in 2018 after failing to meet financial requirements set by regulators and defaulting on massive loans. It had taken a Ksh 200 million loan from Co-operative Bank to build its headquarters, but later struggled to repay members, issue loans, or maintain liquidity.
As the financial situation worsened, many university staff and other investors were unable to access their savings. There were also allegations of misappropriation by senior officials. The losses were estimated to be around Ksh 2 billion.
In early 2024, the government formed a task force to look into the possible revival or restructuring of the Sacco. Leaders in the region pushed for Sacco’s license to be reinstated within 90 days to allow members to recover their savings and access loans.
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