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Kuscco to sell insurance arm and auction houses to refund saccos
Cabinet Secretary of Co-operatives and Micro,small and medium enterprises (MSMES) Development Wycliffe Oparanya addressing farmers at Kakamega Approved school grounds on February 26, 2025.
The troubled Kenya Union of Savings & Credit Co-operatives Ltd (Kuscco) is considering the sale of a majority stake in its insurance subsidiary and auction houses and land, held by loan defaulters as part of efforts to raise money to refund member savings and credit cooperative societies (Saccos).
The firm, which suffered a Sh13.3 billion heist under the watch of former officials, is likely to offload a majority stake in Kuscco Mutual Assurance—the insurance subsidiary—to strategic investors, according to the Cabinet Secretary for Cooperatives and Micro, Small and Medium Enterprises Development Wycliffe Oparanya.
In addition, he said Kuscco has started the process of selling houses and land of those who defaulted on mortgage financing under the Kuscco Housing Cooperative (KHC).
The subsidiary, which had funded housing projects in areas such as Kitengela and Kisumu, will be discontinued.
Kuscco is pursuing the strategy of raising funds through restructured operations and also hopes that the legal process of going after the former officials will unlock more funds for Saccos.
“Kuscco will narrow itself to its core mandate of advocacy and training. If that insurance firm was doing well, the plan is to sell out the majority stake so that it can operate on its own,” said Mr Oparanya, adding that the proceeds from such transactions will be partly used to refund Saccos.
He disclosed that 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.
Mr Oparanya said SLF will operate as a secondary cooperative under Sacco Societies Regulatory Authority (Sasra) regulations.
Part of the proceeds from Kuscco’s sale of a stake in the insurance arm and auction of houses, will be used as capital in the new SLF to continue doing business and in turn refund Saccos from the profits realised.
“SLF will be repositioned as a secondary cooperative under Sasra regulations, ensuring a clear separation from Kuscco’s core functions. SLF will operate under an independent board and CEO, effectively running the process of recovery and refund to the Saccos the owed funds,” said Mr Oparanya.
The proposed restructuring of Kussco has received the ministry's backing, with Mr Oparanya directing the constitution of a new nine-member board as the current interim board exits.
“The government of Kenya through the Ministry is directing the constitution of a new nine-member board with a three-year mandate to revive Kuscco and build the confidence of Saccos in Kenya as a secure investment vehicle at the grassroots. This will help streamline governance with the ability and speed needed in times like this,” said Mr Oparanya.
