Ksh 12.5 Billion Lost in Fraud As KUSCCO Auctions Member Properties

The Kenya Union of Savings and Credit Cooperatives (KUSCCO) is facing a deep financial crisis following revelations of widespread fraud and mismanagement that have resulted in a loss of KSh 12.5 billion. The embattled organization is now auctioning high-value properties belonging to its members, citing defaults as it struggles to stay afloat.

A recent advertisement in a local daily revealed that KUSCCO had listed 80 properties for sale, including plots, unfinished buildings, apartments, and motor vehicle workshops. However, the root cause of the crisis appears to be internal financial malpractice. An internal audit conducted last November exposed significant illegal withdrawals and financial mismanagement within the union, leading to multiple arrests and severe financial losses for its members.

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As investigations unfold, member SACCOs have been forced to write off their investments, deepening the financial strain on thousands of individuals who had entrusted their funds to the union. The crisis prompted the dismissal of KUSCCO’s Group Managing Director, George Ototo, and National Chairman, George Magutu, last year. Their removal followed mounting financial challenges that left the union unable to meet its obligations to member SACCOs.

The financial turmoil at KUSCCO reportedly began when its Central Finance Facility (CFF) encountered operational difficulties, triggering a chain reaction of liquidity problems. With the crisis still ongoing, the fate of KUSCCO and its members remains uncertain as the authorities continue to investigate the extent of fraud and possible avenues for financial recovery.

The unfolding scandal underscores the urgent need for regulatory scrutiny and reforms within Kenya’s cooperative movement to prevent similar financial disasters.

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