The troubled Kenya Union of Savings and Credit Cooperatives (KUSCCO) is auctioning multimillion properties of members, ostensibly for defaults, as it grapples with loss of funds due to mismanagement.
- In an advertisement in a daily newspaper, the union listed 80 individual clients whose properties range from plots, unfinished buildings, apartments, and motor vehicle workshops.
- In November, an internal audit showed the Union had lost KSh 12.5 billion as a result of illegal withdrawals and widespread mismanagement, which has led to several arrests and placed a financial loss on member SACCOSs.
- As the fraud within the union unravels, with several arrests and court cases, member SACCOs have been forced to write off their investments.
In January last year, KUSCCO’s Group Managing Director, George Ototo, as well as the National Chairman, George Magutu, were fired following financial challenges resulting in the union’s inability to meet obligations associated with the investments by its member SACCOs.
The crisis, which is still ongoing, begun when the union’s Central Finance Facility (CFF) began encountering significant challenges precipitated by panic withdrawals between October 2023 and January 2024, affecting its operations and ability to reimburse deposits to members. The Government ordered for a probe into allegations that it was running several businesses and offering products without the requisite licensing and approvals, piling onto the growing woes at the organisation.
Some of the properties on sale are located in lucrative areas such as Kileleshwa, Kitengela, Lukenya, Umoja, Kiambu, Thika town and Nyayo estate. Other properties booked for sale are in Kisumu, Mombasa, Kilifi, Uasin Gishu, Kisii, Bungoma, Homabay among others.
KUSCCO mainly offers financial services to Saccos i.e. loans and insurance services, and some technical services such as consultancy, by-laws drafting, that are too expensive for most cooperatives.
