Ukaguzi Sacco’s growing lending business is facing a test as millions of shillings remain unpaid by borrowers and a separate investment in KUSCCO continues to yield little money.
The Sacco’s Supervisory Committee has called for tighter lending controls after recording Ksh 47.03 million in loan arrears at the end of 2025, warning that weak screening of borrowers could expose members’ funds to further losses.
The findings were presented during the institution’s 53rd General Meeting on March 28, 2026. The committee reported that Ksh 3.27 million had been classified as losses because borrowers had failed to pay for more than a year.
Loans worth Ksh 13.95 million were also categorised as doubtful or substandard, while another Sh29.81 million had outstanding payments overdue by between one and three months.
Ukash loans were identified as a particular concern because of their high default rates. The committee recommended stronger credit assessment procedures and stricter eligibility rules before loans are approved.
The arrears come as Ukaguzi continues to expand its lending operations. Its loan portfolio increased by 6.68 per cent to Sh3.02 billion, while disbursements reached Ksh 1.69 billion, up from Ksh 1.68 billion in 2024.
However, the figures underline the importance of ensuring that lending growth translates into actual repayments. Uncollected loans can tie up funds that would otherwise support new borrowing by members.
The Sacco is also seeking clarity over Sh50 million invested in the Kenya Union of Savings and Credit Co-operatives (KUSCCO) in 2023. It received just Ksh 756,705 in 2025, leaving the bulk of the expected recovery unresolved as discussions with KUSCCO management continued.
The investment is part of a wider crisis affecting the umbrella organisation. A forensic audit by PwC found that KUSCCO had accumulated Ksh 5.3 billion in non-performing loans by December 2023. The wider investigation exposed serious financial irregularities and raised concerns about billions of shillings entrusted to the organisation by member SACCOs.
Ukaguzi also had to contend with Sh98.85 million in member contributions that employers had deducted but had not remitted by December 31, 2025.
Meanwhile, operating income rose to Ksh 510.90 million, beating the budget of Ksh 388.45 million by 31.5 per cent. Expenditure, however, climbed to Ksh 398.36 million against a planned Ksh 375.37 million.
Membership increased from 2,376 to 2,455 during the year.
The committee recommended better risk management, closer supervision and a review of possible excise duty and withholding tax obligations. Addressing the outstanding loans, delayed employer remittances, and KUSCCO exposure will remain important as the Sacco seeks to protect members’ savings and sustain its lending activities.
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