Kenya’s Metropolitan National Sacco has been declared technically insolvent by Commissioner for Co-operatives David Obonyo, with an estimated Sh7 billion required for the institution to regain financial stability.

The insolvency means the Sacco cannot meet its financial obligations, including repaying members and fulfilling contractual commitments.

𝐀 𝟐𝟎𝟐𝟐 𝐠𝐨𝐯𝐞𝐫𝐧𝐦𝐞𝐧𝐭-𝐨𝐫𝐝𝐞𝐫𝐞𝐝 𝐢𝐧𝐯𝐞𝐬𝐭𝐢𝐠𝐚𝐭𝐢𝐨𝐧 𝐮𝐧𝐜𝐨𝐯𝐞𝐫𝐞𝐝 𝐦𝐚𝐣𝐨𝐫 𝐟𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐢𝐫𝐫𝐞𝐠𝐮𝐥𝐚𝐫𝐢𝐭𝐢𝐞𝐬, 𝐢𝐧𝐜𝐥𝐮𝐝𝐢𝐧𝐠:

Sh49 million in M-Pesa transactions by a single teller at the Nakuru branch.

Overstatement of the Sacco's premier loan facility by Sh7 billion due to suspected phantom members.

False dividend payments issued from member savings rather than surplus reserves.

Sh490 million in non-performing loans irregularly issued to employees.

Sh176.9 million unaccounted for across multiple branches.

Sh703 million in unexplained board expenditures from 2015 to 2022.

Despite the scale of the financial mismanagement, authorities are reluctant to wind up the Sacco, as this could hinder the recovery of members' funds and complicate legal action against those responsible.

Under Kenya’s Co-operative Societies Act, only the Sacco’s board has the legal standing to sue or be sued on its behalf, posing a significant challenge to holding accountable those implicated in the financial mismanagement.

The Metropolitan Sacco crisis and recent KUSCCO's Sh13.3 billion scandal reveal systemic governance failures rooted in Kenya's 117-year cooperative legacy, where colonial-era structures designed for export crop control (coffee, dairy) never fully evolved with technology into member-centric institutions.