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By Steve UMIDHA
The Kenya Union of Savings & Credit Co-operatives Ltd (KUSCCO) is seeking to recover 75 percent of the Sh13.3 billion stolen by its former managers, as it promises to further trim its workforce to below the 96 staff it presently has.
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It said Tuesday that the process will take at least three years – meaning, the firm could convalesce an estimated Kes8.8 billion in assets tied to the umbrella body for Savings and Credit Cooperatives in Kenya, expecting full recovery to last 5years.
“We believe we can achieve this (the 75 percent recovery) within the next three years and 100 percent recovery in 5 years,” said the new KUSCCO group managing director, Arnold Munene while addressing journalists in Nairobi.
While Kuscco is still operational, it is, however, not engaging in deposit-taking and lending business at the moment. Its interim – Board Chairman David Mategwa revealed that more heads will roll as the firm’s reorganisation bid begins to take shape.
“We have a lot of good things happening now, but we do not want to make noise – at least not yet…we are handling these issues quietly, internally. Many have voluntarily left the organisation, and we are currently operating with a lean staff of 96 workforce, but more are leaving,” said Mategwa.
The announcement follows a comprehensive forensic audit by PricewaterhouseCoopers (PwC) that uncovered gross errors in KUSCCO’s financial dealings leading to a loss of over Sh 13.3billion.
This includes non-performing loans totaling Sh3.7 billion, overstated profits of nearly Sh798 million over the last six years, irregular commissions amounting to Sh2.7 billion, and mismanagement of the central finance fund to the tune of Sh1.3 billion.
KUSCCO, a key player in Kenya’s cooperative sector, which has seen member savings exceed Sh1 trillion, plays a critical role in providing financial services to millions of Kenyans.
Unfortunately, before the Cooperatives Bill 2024, apex institutions like Kuscco were not properly organised, but that could change sooner rather than later if plans by the Kenyan Senate to fasttrack the pending bill is accelerated.
The government is spearheading the recovery efforts which include the restructuring of KUSCCO’s governance and the formation of a new nine-member board tasked with revitalizing the organization.
Principal Secretary in the State Department for Co-operatives Patrick Kilemi, said that the new board will oversee the recovery strategy for the union, ensuring that SACCOs remain secure and viable investment vehicles.
In addition to restructuring KUSCCO, the government has introduced reforms to modernize the regulatory framework for SACCOs.
Cabinet Secretary for the Ministry of Cooperatives and MSMEs Development Wycliffe Oparanya in a statement assured the public of the government’s commitment to resolving the financial irregularities and restoring confidence in the cooperative movement.