The government has picked a new chief executive officer (CEO) to run the Kenya Union of Savings and Credit Co-operatives (Kuscco), seizing control of the troubled umbrella organisation, which is still reeling from a Sh13.3 billion financial scandal linked to some of its former officials.
Official correspondence seen by Business Daily revealed that Peter Wanjohi Kiama, the Deputy Commissioner for Cooperative Development in the State Department for Cooperatives, has been seconded as CEO of Kuscco for three months, replacing Arnold Munene, who held the position.
“It has been decided that you be seconded to the Kenya Union of Savings and Credit Cooperatives (Kuscco) as the acting Group Managing Director and Chief Executive Officer with immediate effect,” Wycliffe Oparanya, Cabinet Secretary for Cooperatives and Micro, Small and Medium Enterprises Development, said in a letter to Mr Kiama.
“You are accordingly expected to ensure seamless and efficient operations of Kuscco during this period. I wish you every success in this appointment,” the CS further stated in his letter dated January 28, 2026.
Insiders said Mr Kiama’s secondment as CEO of Kuscco gives the government greater grip over the ongoing investigations into the heist and the multimillion- shillings compensation of Saccos affected by the scandal.
Mr Kiama will be backed by an interim board, which was picked in 2024 to oversee the restructuring, recovery of lost assets and restoration of governance at Kuscco following the financial scandal.
Compensation of Saccos
Kuscco has, since last year, stepped up recoveries and compensation to Saccos affected by the scandal.
It targets recovering at least 70 percent, or Sh6.2 billion, of the Sh8.8 billion principal amount that Saccos had invested in it, and has been relying on the sale of non-core assets, auctions and loan recoveries to process the planned refunds.
For example, as of December 2025, Kuscco had increased its total compensation to affected Saccos to Sh369.3 million, following a fresh payout of Sh152.4 million after offloading non-core assets and stepping up loan recoveries.
The Sh152.4 million payment in late 2025 added to the Sh216.9 million that had been paid out the previous year.
The latest payout included Sh112 million as fixed deposit compensation, which saw 116 Saccos receive between Sh9.23 million and Sh1,680, depending on how much they had invested.
Records show that Sh35.4 million has also been paid out to individuals who had invested money in the Kuscco Housing Fund (KHF) for the purchase of houses, while a further Sh5 million has been distributed to those who had saved money under the Front Office Savings Activity account, known as Kusasa.
The top recipients from the Sh152.4 million distributed in late 2025 included Hazina (Sh9.23 million), Njiwa (Sh9.23 million), UN Sacco (Sh7.58 million), IG Sacco (Sh7.56 million), Ndege Chai (Sh5.35 million) and Mhasibu Sacco (Sh4.39 million).
The amount was generated from the sale of more than 32 vehicles, the reduction of Kuscco’s branches to five from 17, and the trimming of staff to 79 from 250. Kuscco closed branches in Kitengela, Thika, Nyeri, Meru, Eldoret, Kericho, Kisii and Kisumu to cut operating expenses and concentrate on advisory, training and lobbying services.
In 2024, Kuscco paid out Sh216.9 million, mostly to small saccos. Of this amount, Sh132.2 million went towards partial settlement of fixed deposit savings, while Sh84.7 million was used to repay investments in the KHF.
Cash-raising strategy
As part of its cash-raising strategy, Kuscco plans to sell a 60 percent stake in Kuscco Mutual Assurance, its insurance subsidiary, and auction houses and land held by defaulters of mortgages issued under the KHF. It is also seeking to recover loans from Saccos that had defaulted on repayments.
Kuscco is currently auctioning houses and parcels of land valued at about Sh1.7 billion held by 684 individuals who have defaulted on loans issued through its housing fund.
The properties under auction are located in different parts of the country, including Kitengela, Kiserian, Kajiado, Nyayo Estate, Kisumu, Thika, Machakos, Webuye, Bungoma, Kisaju, Lukenya and Syokimau. The Kitengela houses are going for Sh9.5 million, according to auction details.
Top former Kuscco officials, including the then Managing Director George Ototo, have been taken to court over the cash scandal. Others charged include former chairman George Magutu Mwangi, ex-finance manager George Ochola Owino, Jackline Pauline Atieno Omolo, who was offering legal services, and Mercy Njeru, who led the controversial radio project.
