The Kenya Union of Savings and Credit Co-operatives (Kuscco) is seeking the intervention of the Commissioner for Co-operative Development, David Obonyo, to help trace 150 saccos that have gone missing after borrowing Sh1.46 billion from its Central Finance Fund (CFF). Only Sh133.8 million of the loans is secured through deposits, leaving Kuscco with Sh1.33 billion in defaulted loans it is struggling to recover.
The 150 missing saccos borrowed between 2001 and 2024 and have since either gone dormant or ceased operations entirely. The affected cooperatives are spread across Nairobi, Western, Coast, Rift Valley, and Mount Kenya regions. A forensic audit by PricewaterhouseCoopers (PwC), finalized in November 2024, raised concerns that some of the saccos may have been fictitious entities created to siphon funds from Kuscco’s lending program.
Of the 150 Saccos, 115 had deposited a combined Sh133.8 million with Kuscco, while the remaining 35 had no deposits at all. Some of the top Kuscco defaulters include Nitunze Sacco (Sh320 million), Mucumewo Sacco (Sh90.02 million), Thika Tea Sacco (Sh87.19 million), Sukari Sacco (Sh78.6 million), and Soko Sacco (Sh38.19 million). Kuscco’s managing director Arnold Munene has called on the government to verify the registration status of the affected Saccos and determine whether they still exist, were liquidated, or were never formally incorporated.
The crisis stems from a wide-ranging kuscco scandal uncovered by PwC, which found a total of Sh13.3 billion lost through fraudulent lending, manipulated accounts, insider theft, and governance failures. The 208-page PwC audit report implicated at least 23 senior officials and revealed Kuscco is insolvent, with liabilities of Sh17.7 billion against assets of just Sh5.2 billion. Among the findings was the forgery of the signature of a deceased auditor on the 2022 financial statements and Sh6.5 billion in unreported internal loans.
PwC’s audit also detailed Sh1.6 billion in questionable commissions and Sh206 million in undocumented cash withdrawals between 2018 and 2023. Former chief cashier Francis Wande admitted to delivering Sh135 million in cash to former managing director George Ototo and former finance manager George Owino over seven years. Ototo allegedly received a Sh20 million “loan” that was never repaid.
- 58 Kenyan Saccos Risk Bank Account Freezes Over Sh1.36 Billion Loan Defaults to Kuscco
- Equity Bank Offers Full Asset Financing for CFAO Vehicle Buyers
- NCBA Bank Partners with Mobikey to Finance MAN Trucks and Hyundai Equipment
Following the audit, the government dissolved Kuscco’s board in May 2024 and appointed a nine-member interim board to lead a three-year recovery plan. The audit report was handed over to Inspector-General of Police Douglas Kanja for criminal investigations. Ototo, Owino, and other former officials are facing charges of theft, fraud, money laundering, and uttering false documents. All have denied the charges and are out on bond.
In July 2025, Kuscco issued demand notices to 58 active Saccos for a combined Sh987.86 million in arrears. Among the top defaulters were Kencom Sacco (Sh377.5 million), Nacico Sacco and its affiliate (Sh358.01 million), and Maseno University Sacco (Sh106.43 million). To address its insolvency, Kuscco has cut staff, shut eight branches, and begun liquidating non-core assets, including real estate linked to defaulted mortgages under its housing arm. It is also seeking to sell a 60% stake in its insurance unit, Kuscco Mutual Assurance.
The scandal has disrupted operations among member Saccos, some of which have made provisions for losses running into hundreds of millions. Stima Sacco provisioned Sh108 million, Kimisitu Sacco Sh353.95 million, and Balozi Sacco Sh437.55 million. Others, like Qona Sacco (formerly Safaricom Sacco), spread provisioning over four years, breaching IFRS 9 rules that require upfront recognition of expected credit losses.
In response, the government suspended new Sacco registrations for three months and initiated a review of the SACCO Societies Act to strengthen oversight and governance. Kuscco’s new board is targeting the recovery of at least 70% of the Sh8.8 billion in principal invested by member Saccos over the next three years.
Jefferson Wachira is a writer at Africa Digest News, specializing in banking and finance trends, and their impact on African economies.