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Kuscco faces auction by PCEA Sacco claiming Sh109m
Rupsa Sacco said it sought the auction orders after Kuscco failed to comply with a ruling by the Co-operative Tribunal directing it to settle the debt, even as it continued paying deposits owed to other saccos.
A Ruiru-based sacco has obtained court orders allowing it to auction movable assets belonging to the Kenya Union of Savings and Credit Cooperatives (Kuscco) over unpaid deposits and interest amounting to Sh108.8 million.
The move threatens to further complicate Kuscco’s efforts to stabilise its finances after it emerged that more than Sh13 billion was lost, allegedly through fraud involving some of its former officials and through investments in business lines it was not licensed to undertake, including lending, mortgages and insurance.
The losses, combined with defaults on loans and mortgages it had issued irregularly, had severely strained its liquidity and left it unable to meet obligations to member saccos.
This marks the first known case of a sacco securing legal authority to auction Kuscco’s movable assets, piling pressure on the organisation as it seeks to regain its footing and refund members’ deposits.
Rupsa Sacco, formerly known as PCEA Ruiru Sacco, said it sought the auction orders after Kuscco failed to comply with a ruling by the Co-operative Tribunal directing it to settle the debt, even as it continued paying deposits owed to other saccos.
The sacco said it had exhausted all avenues to recover the funds, including legal redress before the tribunal, which ruled in its favour last year and ordered Kuscco to release the money.
“Our only objective is the recovery of our members’ funds,” said Rupsa Sacco chief executive Julius Mbugua.
“After exhausting diplomatic engagement, we sought redress from the tribunal and obtained a favourable judgment. Given the legal implications of the matter, we expected the outstanding debt to be accorded appropriate priority by Kuscco.”
Rupsa is seeking Sh108 million, comprising deposits and investments of Sh88.95 million, investment interest of Sh6 million, deposit interest of Sh13.3 million, with the balance accounting for taxed costs and collection fees.
The sacco moved to the tribunal in 2024 after unsuccessfully attempting to withdraw its deposits for more than two years, with Kuscco citing liquidity challenges.
It said Kuscco later paid deposits totalling Sh369.3 million to other member saccos in December 2025 but continued to ignore its claim despite the tribunal ruling.
“Noting the self-reported change in financial fortunes, and backed by the tribunal’s judgment in our favour, Rupsa Sacco fails to understand why Kuscco has deliberately chosen not to honour our outstanding and legitimate claim,” the sacco said in a statement.
Kuscco officials confirmed that the organisation paid part of members’ deposits in December after saccos provided proof of their investments and deposits, as required by a government-appointed forensic audit of Kuscco’s accounts by PricewaterhouseCoopers (PwC).
“In the case of Rupsa, they did not respond to the PwC validation exercise, hence the current impasse. But once they comply by responding to the questions PwC asked, we are ready to start paying them,” said Kuscco general counsel Cecil Miller.
A copy of a letter sent by PwC to member saccos, seen by this publication, shows that the firm requested evidence of investments or deposits in Kuscco, including copies of cheques or bank transfer forms and letters of acknowledgement issued by Kuscco.
Mr Mbugua, however, said he was not aware of any such validation exercise and that Kuscco had never raised it with Rupsa or during tribunal proceedings.
“If that was the reason they are not paying us, they would have said so [in litigation],” he said.
The tribunal ruling, issued in April 2025, shows that Kuscco cited liquidity challenges as the sole reason for its failure to refund Rupsa’s deposits. The PwC verification exercise began a month later, in May 2025.
