The Government has reiterated its dedication to rebuilding trust in Kenya’s co-operative sector by implementing extensive SACCO reforms, retrieving misappropriated funds, and implementing stricter accountability measures for officials involved in financial misconduct.
This came to light as Cabinet Secretary for Co-operatives and MSMEs Development, Wycliffe Oparanya, along with Principal Secretary Patrick Kilemi, addressed the Senate Standing Committee on Trade, Industrialization and Tourism under the leadership of Issa Boy Juma.
The discussions centered on current SACCO sector reforms, the condition of Metropolitan National SACCO, and the recovery and stabilization initiative at KUSCCO.
In his address to the Committee, Oparanya stated that recovery measures at Metropolitan National SACCO were continuing through administrative, judicial, and investigative procedures designed to protect members’ savings and ensure accountability for those responsible.
He informed senators that investigations by the Directorate of Criminal Investigations were still ongoing, while surcharges had already been imposed on implicated parties. Legal proceedings before the Co-operative Tribunal were also advancing in compliance with established legal procedures.
The Cabinet Secretary emphasized that the Government was resolute in retrieving funds whenever feasible and preventing future financial failures within the SACCO movement.
Regarding KUSCCO’s situation, Oparanya provided senators with an update on the advancement of the recovery and stabilization program, which followed a forensic audit and account reconstruction that revealed financial discrepancies.
He acknowledged that the recovery process remained complicated but highlighted significant accomplishments through governance enhancements, claim verification, debt restructuring, cost optimization, asset retrieval, and legal actions against those implicated.
The Cabinet Secretary additionally disclosed that partial reimbursements had already been issued to affected SACCOs and members as part of initiatives to restore stability and confidence in the sector.
Oparanya also outlined numerous reforms being implemented by the Ministry to enhance supervision and governance of SACCOs nationwide.
These reforms are based on Sessional Paper No. 4 of 2020 concerning the National Co-operative Policy and the Co-operatives Bill, 2024, which aim to modernize and streamline co-operative sector operations.
Proposed measures include expanded authority for the Sacco Societies Regulatory Authority, enhanced member protection mechanisms, establishment of a SACCO Deposit Guarantee Fund, creation of a Central Liquidity Facility, a Shared Services Platform, a SACCO Stabilization Fund, and implementation of a digital co-operative registry.
“These reforms are designed to strengthen governance, enhance supervision, and protect members from financial losses due to mismanagement and fraud,” Oparanya informed the Committee.
Kiambu Senator Karungo wa Thang’wa, a committee member, stated that Parliament would not permit a small group of individuals to take advantage of SACCO loopholes and pilfer savings from ordinary Kenyans.
“Although SACCOs are privately member-owned institutions, we cannot allow a few people to defraud or take money from ordinary Kenyans, including farmers, teachers, police officers, and workers who have placed their savings in their care,” Thang’wa stated.
He stressed the necessity for more stringent laws to improve oversight, accountability, and protection of members’ funds.
Meanwhile, Senator Jonathan Mandago affirmed that the Senate remained dedicated to supporting reforms focused on strengthening the co-operative sector and fostering sustainable economic growth.
Mandago noted that the Committee had spent most of the day discussing with the Ministry the status of SACCO reforms and considering pending statements before the committee addressing sector challenges.
He indicated that the Senate would continue advocating for policies and legislation that encourage accountability, inclusivity, and responsible management of co-operative societies.
The meeting occurred at a time when the SACCO sector was under intense examination due to financial difficulties impacting certain co-operative societies, causing concern among millions of members who depend on SACCOs for savings, credit facilities, and investment opportunities.
The Government has maintained that the ongoing reforms aim to restore public confidence, enhance institutional protections, and ensure the long-term viability of the nation’s co-operative movement.