Kuscco business to be regulated after audit reaveals Sh6bn theft
CEO of the SACCO Societies Regulatory Authority Peter Njuguna speaks during the Inauguration of the new KUSCCO Board of Directors on May 07, 2024, at NSSF Building in Nairobi.
Photo credit: Photo | Billy Ogada | Nation Media Group
The government is seeking to regulate the deposit and lending business of the Kenya Union of Savings and Credit Co-operatives (Kuscco) to protect billions of shillings that saccos deposit with the organisation.
This decision follows the revelation this week that top Kuscco officials fleeced the entity of Sh6.56 billion between February 2013 and April 2024.
The Sacco Societies Regulatory Authority (Sasra) CEO Peter Njuguna on Tuesday said the government is firming up regulations to oversee Kuscco’s activities.
“Regulation of secondary co-operatives and saccos is an emerging issue in Africa and we have seen Malawi start to do it,” said Mr Njuguna.
Currently, both deposit and non-deposit-taking saccos are regulated by Sasra. Kuscco, on the other hand, is a secondary sacco that does not take deposits directly but from primary saccos.
“Kuscco has various lines of businesses and its sacco business is not regulated. We are looking to have a framework where this will be brought under regulation,” he said. The union has a membership of 4,168 saccos and an estimated Sh18.9 billion in deposits.
Kuscco was registered in 1973 as an umbrella body for saccos but has since morphed into an unregulated deposit-taking operation with different subsidiaries, including Kuscco Mutual Assurance and Kuscco Housing.
Co-operatives and MSME Cabinet Secretary Simon Chelugui on Monday disbanded the Kuscco board following an audit that revealed the extent of the theft at the institution.
On Tuesday, the CS appointed an interim 15-member board that will oversee operations of Kuscco for a year.
Caretaker board
Kenya Police Sacco chairman David Mategwa will chair the caretaker board. The other members are Joel Gachiri, Osman Khatolwa, Jeniffer Mburu, Robert Njue, Francis Muriithi, Julius Munguti, Peter Ngugi and William Mbogo.
Also on the new board are Mathew Ruto, Philip Rirei, Sarah Nyaenya, Kennedy Keya, John Zero and Priscilla Maranga.
Mr Chelugui said the government will pursue both past and present Kuscco officials implicated in the heist to recover the lost funds.
“Preliminary findings underscore the urgent need for reconstruction of the union’s financial records to establish accurate opening balances, a critical step to restoring trust and transparency,” said the CS.
