KUSCCO (Kenya Union of Savings and Credit Co-operative Society) Housing Cooperative Society, a subsidiary set up under the now cash-strapped Central Finance Fund(CFF), is under investigations by the Office of Commissioner for Cooperative Development.
In a recent Gazette Notice, the Commissioner David Obonyo, on a request from the Housing Cooperative’s members, ordered for an inquiry into the KUSCCO housing wing. A team headed Mr. Fondo Nzovu, Assistant Commissioner for Co-operative Development, Mr John Kariuki Kinyanjui, Senior Co-operative Auditor at Nairobi HQ, is looking at KUSCCO Housing Cooperative by-laws; working and Financial Conditions of and; the conduct of present or past management committee of KUSCCO Housing Co-operative Society Limited.
An inquiry into affairs of the Housing arm of KUSCCO follows the dramatic collapse of the giant Union, dragging along with its assets and financial investments to the tune of close to KSh 13 billion through suspected fraudulent dealings by members of its dismissed Board of Directors.
A caretaker team has since been appointed, led by Kenya National Police SACCO Chairman David Mategwa, to salvage the Union and pay off debts owed to member SACCOs. This is after revelations of the heist at the giant union prompted the Government to dismiss the organization’s entire Board of Directors and part of the then management team led by George Ototo, its former CEO.
KUSCCO Housing Cooperative Property Portfolio
KUSCCO Housing Cooperative properties are valued at approximately KSh 5 Billion as at March 2025.Available data shows that the insolvent KUSCCO had liabilities of KSh 17.7 billion against assets of KSh 5.2 Billion, indicating a significant financial shortfall.
An audit reveals that Union had irregularly transferred over KSh 318 Million to its housing unit, a subsidiary that operated without proper oversight or integration into the Union’s core financial operations.
Flows into its housing subsidiary worsened the Union’s liquidity crisis and made it difficult to trace members’ deposits.
The Union is in possession of vast real estate properties, a rich pipeline of properties that includes Houses, Plots of land, Apartments and Commercial buildings, located mostly in Nairobi, Kisumu, Kiserian and Kitengela in Kajiado County.
An estimated KSh 8 Billion, obtained from suspected fraudulent transactions and mismanagement, was pumped into these properties, sums that the auction intends to recover.
KUSCCO Housing Fund (KHF) was established in 1996 to mobilize funds and provide mortgage solutions to Co-operators and Co-operatives in Kenya.
As the caretaker board gets down to trace some of the assets of KUSCCO so as to refund SACCOs that had sunk millions into the Union, the amount of losses that SACCOs may have suffered in terms of not being able to provide credit to their members, is still unaccounted for.
Some of the SACCOs that suffered from exposure to the Union include Kenpipe SACCO which invested KSh 149,180,285.00 in fixed deposits and another KSh 698,113.00 held under a savings product, Balozi SACCO(KSh KSh 437.6million)Qona SACCO, formerly Safaricom SACCO( KSh 134.7m), Kimisitu SACCO( has made an impairment charge of KSh 353.95m, due to short term deposits and investments made by the Society in KUSCCO Limited, Kenya Highlands SACCO( KSh 4,042,558.00) Tower SACCO( KSh 41,087,914.00 and Univision SACCO- which has already made a provision for loan losses and impairments at KSh 120 million for the 2024 period.
The rip off at this Union sent shockwaves through the entire cooperatives sector, one that was just emerging from poor public image due to numerous collapsed societies, brought down through fraud and mismanagement.
The Cooperatives industry still lacks an inter-lending facility following the collapse of a similar facility that was run by the now insolvent Union. This is as National Treasury scrambles a liquidity facility to assist financially distressed Savings and Credit Cooperatives(SACCOs).
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