Due to unauthorized withdrawals of Ksh. 6 billion at the Kenya Union of Savings and Credit Co-operative (KUSCCO), SACCOS are expected to lose billions of shillings.
Depending on the exposure of their SACCO, depositors will also sustain large losses.
Their financial statistics show that members of Kimisitu SACCO will lose more than Ksh. 353 million, while Mhasibu SACCO is expected to lose more than Ksh. 480 million.
Despite their efforts to stop their investments with KUSCCO, members of the Law Society of Kenya SACCO have also been hit hard, with the SACCO predicted to lose at least Ksh.19 million. Ksh. 42.18 million was paid to the SACCO, leaving Ksh. 19 million that KUSCCO neglected to honor.
The management of Stima Deposit Taking SACCO was now compelled by this trend to write off their Ksh. 108 million deposits at KUSCCO. Balozi SACCO Society also took this action, writing off a Ksh. 437.5 million investment in KUSCCO.
“While our conversation with KUSCCO is significant, I believe the problem is mostly one of provisioning. “We are leading that process to make sure that going forward, we still need the advocacy,” stated Dr. Gamaliel Hassan, CEO of Stima SACCO. “We are hopeful and do believe that KUSCCO will be revived.”
To avoid a repeat of the incident, the State Department for Cooperatives’ Principal Secretary has said that they will supervise the restructuring of KUSCCO and the SACCO Societies Regulatory Authority (SASRA).
“To guarantee that anyone accepting deposits is subject to SASRA regulation, we are revising the SASRA Act of 2008.” We’re going to take another look at SASRA’s configuration. Is SASRA performing at its best? Does SASRA have the authority to oversee our roughly 4,000 SACCOS? The response is no. “A shilling in a SACCO should be as safe as a shilling in the bank” has been our motto. “We should be able to do the things that banks are doing if that’s what we want,” stated Patrick Kilemi, the Principal Secretary for Cooperatives.
The government assures SACCO members that KUSCCO lessons have been learnt and that they will eventually receive a portion of their deposits. Nonetheless, depositors continue to wonder if there was anything that might have been done to lessen these losses.
