Kenyan Savings and Credit Cooperative Societies (Saccos) have been making headlines in recent weeks, as concerns grow over financial mismanagement in the sector.

Reports have revealed suspicious banking transactions, staff and members colluding to embezzle Millions, creating fake shares to inflate contributions, Officials forging signatures to steal from Members, Insolvency - A lot is happening.

In this Article we will briefly take a look at all the scandals that have put Saccos on the Spotlight recently. Additionally, we will share a report on Dividends Payouts by different Saccos - Buckle up.

KUSCCO SCANDAL.

A forensic audit recently uncovered a massive Sh13.3 billion fraud at the Kenya Union of Savings & Credit Co-operatives Ltd (Kuscco), including the forging of a deceased auditor's signature on 2022 financial statements.

The investigation revealed that top executives, including former managing director George Ototo, finance manager George Owino, and chairman George Magutu, were involved in cooking books, large-scale theft, bribery, and unexplained bank withdrawals, leaving Kuscco insolvent by Sh12.5 billion.

The audit exposed Sh9.3 billion in misstated accounts, Billions in concealed interdepartmental lending, and Sh3.7 billion in hidden expenses, putting Sh24.8 billion in deposits from 247 saccos at risk.

The forensic report, found that KUSSCO ran an interdepartmental lending scheme that hid Ksh 6.5 billion in unreported loans.

It emerged that the auditor, Mr Basweti, had died long before the signing of the Kuscco’s books in a strange occurrence that was picked by the auditors after they noticed his signatures in 2022 and earlier documents differed.

The auditors retrieved incriminating information such as e-mails, computer logs, M-Pesa statements and documents of at least 23 top managers at KUSCCO in a review that placed eight executives in the spotlight.

Additional findings include Sh500 million in potentially misappropriated commissions and Sh821 million in overpayments to insurance brokers, including Baobab Insurance agency, which was majority-owned by a former Kuscco managing director.

Mhasibu SACCO is one of the largest casualties of the KUSCCO fraud - losing Ksh480 million fixed deposit account and other savings. According to the SACCO, KUSCCO failed to honour a fixed deposit withdrawal request that matured on January 16, 2024.