Kenya Union of Savings & Credit Co-operatives Ltd (Kuscco) targets to recover at least 70 percent of the Sh8.8 billion principal amount that Saccos had invested in the umbrella body within the next three years.
The recovery, which amounts to about Sh6.2 billion, is the target set for the new nine-member board that is expected to take over from the interim team that replaced the officials who were in place when Kuscco suffered a Sh13.1 billion heist.
Kuscco says the amount will come from various initiatives including the sale of a 60 percent stake in Kuscco Mutual Assurance—the insurance subsidiary— the auction of houses and land held by defaulters of mortgages issued under the Kuscco Housing Cooperative and the recovery of loans from Saccos who had defaulted on payment.
Kuscco acting managing director Arnold Munene said in a media briefing that about Sh136 million has so far been refunded to small Saccos and continued recovery will see the payout hit about 70 percent in three years and rise to the entire Saccos’ principal investment in the entity by the fifth year.
“First of all, we apologise because this [Sh13.3 billion heist by former Kuscco officials] has tortured many people including the Sacco CEOs who have been bashed,” said Mr Munene.
“Our focus is to build trust, bring accountability and transparency. Those Saccos that invested members’ money in Kuscco can be assured that we are working round the clock to refund the principal amount.”
Several Saccos have set aside partial funds or made full provisions to cover the expected loss of billions of shillings worth of deposits and shares in Kuscco.
Some of the Kuscco related loss provisions include Balozi (Sh437.55 million), Mhasibu (Sh408 million), Kimisitu (Sh353.95 million), Kenpipe (Sh149.18 million), Sheria (Sh146.8 million), Qona (Sh134.7 million), Stima (Sh108 million), Amref (Sh90 million) and LSK (Sh19 million).
Mr Munene said that Kuscco has already started auctioning houses and has also written to Saccos who had borrowed and defaulted on about Sh1.1 billion to pay the amount. Kuscco has sold over 32 vehicles and plans to liquidate other non-core assets.
Kuscco, which was running the central finance fund (CFF) for mobilising money from Saccos and then investing it, will pave the way for Sacco Liquidity Fund (SLF) as a new fund to replace CFF.
SLF will operate as a regulated secondary cooperative and will be used as a financial vehicle to help in the recovery process.
Outgoing chairman of the Kuscco interim board David Mategwa said out of the 243 employees that Kuscco had before PricewaterhouseCoopers uncovered the heist, the entity is now left with 96, helping it to trim its operating costs.
“There has been no dismissal. All those who have left decided to resign,” said Mr Mategwa.
Principal Secretary in the State Department for Cooperatives Patrick Kilemi said the ministry has started the process of overhauling Sacco regulations to tighten governance.
“Good governance was like a suggestion, because there were consequences attached to the lack of it. This is part of what we want to cure,” said Mr Kilemi.
