CS Oparanya: KUSCCO starts to refund Saccos Sh6.2b

Cooperatives and MSMEs CS Wycliffe Oparanya during inauguration of the new KUSCCO board on May 12, 2025. [Wilberforce Okwiri, Standard]

Cabinet Secretary Wycliffe Oparanya has said that Kenya Union of Savings and Credit Co-operatives (KUSCCO) has begun refunding money owed to SACCOs.

Oparanya said that KUSCCO will this week begin disbursing sh112 million to Saccos.

KUSCCO is required to refund invested funds amounting to sh6.2 billion to Saccos following significant losses from mismanagement and fraud.

The Sacco has been working on a plan to recover around 70 percent of the sh8.8 billion invested by Saccos within three years through asset sales

Yesterday while addressing Kuscco Annual Leaders’ Summit in Mombasa, Oparanya said that the fiscal distribution is part of the journey to ensure that SACCOs receive their principal investment held at KUSCCO.

He admitted that for the past two years, the KUSCCO situation has weighed on all Saccos members and tested their unity in a big way.

“I am pleased to announce the start of a journey to refund SACCOs with investments at KUSCCO.  I stand here to affirm that KUSCCO has commenced refunding money owed to SACCOs. This week, the Union will begin disbursing Sh112 million to SACCOs,” said Oparanya.

The CS said the refund calculated on a prorated basis, inaugurates a renewed covenant of transparency for the entire cooperative movement.

He said the resources are the direct value of fiscal discipline at the Union derived from the sale of non-core KUSCCO assets and the resolute pursuit of recovery against loan defaulters who ignored legal processes.

He said the refund demonstrates that integrity is our non-negotiable, immutable foundation constructively.

“This is your opportunity to ratify reforms that will shape the direction of your Union. It offers you, as shareholders and investors, an opportunity to guide the institution toward a more member-centric trajectory and help position KUSCCO to its rightful position, a true pillar of the Cooperative movement,” said Oparanya.

He said the SACCO will have a chance to permanently strengthen the Union’s governance and ensure that KUSCCO is renewed as an institution that truly serves its members, advocates boldly, and delivers the capacity you need to thrive.

The CS noted that there are 355 regulated SACCOs consisting of the 177-Deposit-Taking SACCOs and the 178-BOSA with deposits above sh.100 million.

Oparanya said that the other BOSA only SACCOs are not under the prudential supervision of SASRA.

He said the ministry is looking into modalities of bringing unregulated segment of SACCOs under SASRA.

“Furthermore, of the 355-Regulated SACCOs, a total of 216 of them have relatively small balance sheets of less than sh.1 billion in assets totaling to sh79.6 billion which is only 7.4 percent of the total assets,” said Oparanya.

He said that such small SACCOs undermine their competitiveness in the credit business, which today heavily runs on very robust ICT and technological platforms which these SACCOs can hardly afford.

He said a time has come for the SACCO sector to explore market driven solutions of consolidations and mergers of these very many small BOSA-only SACCOs to ensure their financial viability and stability.

Oparanya said that the Cooperative Bill, 2024 is soon to undergo mediation between the National Assembly and Senate and the SACCO Act is undergoing amendment.

He said that a seven-member Committee of Experts was appointed to review the SACCO Societies Act, 2008 and make recommendations on aligning the Act to the emerging trends and challenges in the sector.

The CS said that the reviewed Report on the transformation of the SACCO system in Kenya will establish a Central Liquidity facility for all SACCOs in Kenya to enhance financial stability, creation of a SACCO Deposit Guarantee Fund to safeguard members' deposits and establishment of a shared services legal and administrative framework.

“We are actively reviewing tax regulations to provide definitive guidance especially concerning corporate tax, interest income and even dividends,” said Oparanya.

The CS said that there are only 300 Sacco Societies Regulatory Authority (SASRA) regulated Saccos out of the 14,000 registered ones operating in shadows and it makes it hard to know if they are stealing from people.

He said some people are registering Saccos as a campaign tool.

“Let us not register Saccos anymore especially around this election period. if we involve politics in a saccco we will not go far. Someone has been seeking to register a Sacco for women and they are doing harambee and he is looking to vie for a political seat then if he fails, the Sacco goes under,” said Oparanya.

He said that he was summoned to parliament for refusing to register the Sacco

The CS warned Sacco leaders against borrowing beyond the shares limit and locking other members out from getting loans.

He however admitted that SASRA supervision has not been effective due to inadequate funding.

“SASRA supervision has not been effective as it is underfunded. Fortunately, we have pushed and the treasury has accepted that the levy we have been collecting of sh800 million will go do their supervisory work,” said Oparanya.