SACCOs (Savings and Credit Cooperative Societies) sections are quietly protesting over plans to dissolve the Kenya Union of Savings and Credit Cooperatives Limited(KUSCCO), now facing liquidity problems. Many SACCOs insist that dissolving the Union means all their deposits and investments sunk in the organization, risk going up in smoke.
Top SACCO executives are scheduled to attend a KUSCCO Special General Meeting(SGM) on August 28th 2026. According to a SGM Notice by Commissioner for Cooperative Development David Obonyo, this meeting takes place at All Saints Cathedral Church Hall. Two representatives per shareholder SACCO have been summoned to attend.
SACCOs CEOs to pass resolutions to dissolve KUSCCO
Top of the Agenda at this KUSCCO special general meeting include a resolution to change name and structure of KUSCCO Limited to Kenya Federation of Savings and Credit Cooperatives (KEFESCO).
The objective is to align with the yet to be enacted new Cooperatives Bill 2024, which envisages moving KUSCCO from being a financial intermediary to a Federation-an apex advocacy body only).
The KUSCCO interim Board, headed by Kenya National Police SACCO board chairman David Mategwa, is expected to brief SACCOs on status of the Union, including its current financial position, recovery progress (asset auctions, loan recoveries) and insolvency plan.
SACCOs to vote on Separation of the Union’s Central Finance Facility
SACCOs are also expected to resolve on the matter of separation of KUSCCO’s Central Finance Fund – CFF to become independent SACCO Liquidity Facility regulated by SASRA, with own board/CEO, not under KEFESCO.
Other matters to be discussed at this special meeting directed by Commissioner for Cooperatives Development David Obonyo, include governance reforms, restrictions on deposit-taking and lending, and membership obligations.
This SGM is convened by Commissioner, not board, after a PwC audit showed at KSh 13.3 billion hole in KUSCCO accounts.
Tomorrow’s vote and verdict by SACCOs, is thus, essentially a dissolution of the old KUSCCO business model.
At stake are SACCOs that stashed huge sums of cash as deposits in the financially-crippled central finance facility at KUSCCO, who have since been making write off provisions. The fate of SACCOs that had taken up covers from the KUSCCO Mutual Fund or invested in the Union’s property portfolio, now risks being lost for ever.
This follows a directive from the Sacco Societies Regulatory Authority (SASRA) for SACCOs that are financially exposed to KUSCCO’s financial instruments make such provisions in their accounts.
KUSCCO has been facing financial challenges resulting in its inability to meet obligations associated with the investments by its member SACCOs.
In November 2024, an internal audit showed the Union had lost KSh 12.5 billion as a result of illegal withdrawals and widespread mismanagement.
“We are making provisions for lost investments at KUSCCO as a financial reporting requirement. It is a difficult moment for SACCOs that made investments in KUSCCO but we have to make these provisions as a bitter pill so that we can be financially healthy,” Solomon Atsiaya, Chief Executive Officer of Kenya National Police DT SACCO said then.
The KUSCCO Central Finance Facility (CFF) began encountering significant challenges precipitated by panic withdrawals between October 2023 and January 2024, affecting its operations and ability to reimburse deposits to members.
The Government ordered for a probe into allegations that it was running several businesses and offering products without the requisite licensing and approvals, piling onto the growing woes at the organisation.
“The Authority expects SACCOs to immediately start recognizing impairment losses and make provisions for future write offs that may arise from any such financial investments, in their financial statements,” said Peter Njuguna, the then Chief Executive Officer, Sacco Societies Regulatory Authority (SASRA), said in a letter to registered SACCOs in mid-January 2025.
Both Kenyan laws and International Financial Reporting Standards (IFRS) require Saccos to make provisions for losses from any financial investments made.
Problems at KUSCCO hit the roof when panicking SACCOs were caught up by delays in obtaining their refund deposits placed at the Union’s Central Finance Fund.
Some SACCOs then proceeded to bring their complaints to the Commissioner, the Sacco Societies Regulatory Authority, and other concerned authorities.
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