The Government has cancelled the registration of the Kenya Union of Savings and Credit Co-operative Societies Limited (KUSCCO) and ordered the 53-year-old union into liquidation, formally bringing to an end an effort to revive the financially troubled institution.
The Gazettement seals the fate of the 53-year-old cooperative body as mounting debts, court battles, and financial mismanagement leave members facing billions in losses.
In a Kenya Gazette Notice No. 13907 dated August 31, 2026, Commissioner for Co-operative Development, David Obonyo, said KUSCCO had failed to achieve its objectives due to liquidity challenges, following a resolution by its members to have the Union dissolved.
“Whereas the Kenya Union of Savings and Credit Co-operative Limited (KUSCCO) (CS/2171) has failed to achieve its objectives due to liquidity challenges and whereas KUSCCO members passed a resolution for KUSCCO to be dissolved pursuant to Section 61 of the Co-operative Societies Act, Cap 490, now therefore pursuant to Section 62(1)(c), I cancel the registration of KUSCCO and order that it be liquidated,” said Mr. Obonyo.
The Commissioner appointed CPA Peter Wanjohi Kiama, Deputy Commissioner for Co-operative Development, Habil Olembo Jesse, Principal Co-operative Officer, and Mariam Adam Abubakar, Deputy Chief State Counsel, as liquidators for a period not exceeding one year.
The liquidators have been authorized to take custody of all the Union’s properties, books, and other documents necessary to facilitate the liquidation process.
Under Section 62(2) of the Co-operative Societies Act, any aggrieved person has 30 days to appeal against the cancellation to the Cabinet Secretary responsible for co-operatives or the High Court.
The liquidation follows a special general meeting held in Nairobi last week, where shareholders representing affiliated Savings and Credit Co-operative Societies (SACCOs) resolved to dissolve the debt-ridden Institution in a bid to prevent further losses of members’ savings and assets.
The decision came after government representatives, auditors and legal experts painted a grim picture of KUSCCO’s financial position, with efforts to revive the Union having failed to reverse its deteriorating fortunes.
The move is also expected to halt attempts by auctioneers to attach and sell KUSCCO properties to recover debts owed to various creditors.
For decades, KUSCCO played a major role in lobbying and advocating for the interests of SACCOs and contributed significantly to the growth of the co-operative movement in Kenya.
It’s senior management also earned international recognition, with the Union’s Chief Executive Officer holding positions in global cooperative organizations.
The Institution’s fortunes deteriorated amid allegations of gross mismanagement of members’ resources, mounting liabilities and a growing number of court cases.
Enraged shareholders represented by over 250 affiliated saccos accused the Government of failing to act decisively to recover their money and questioned its role in the management of the Institution.
The Government had already taken measures to address the crisis by dissolving the KUSCCO Board in May 2024 and appointing an interim board headed by the Kenya Police SACCO National Chairman, David Mategwa, to oversee the transition and spearhead efforts to recover members’ savings.
Despite efforts to revive the Union, Mategwa said they had faced numerous legal challenges from creditors and SACCOs seeking refunds of their savings and wanting the Union assets attached and auctioned.
An audit by Grant Thornton, appointed by the Government to examine KUSCCO’s financial affairs, found the Institution insolvent and facing serious financial challenges as it pointed weaknesses in the Unions financial records, including the absence of an asset register and inadequate supporting documentation of its loan book,
Auditors and the legal team said KUSCCO would require about Sh14 billion to restore its operations, against liabilities estimated at Sh17 billion and an asset base of only Sh5.4 billion.
As of August 28, 2026, the Union was facing 291 court cases, and a progress report presented to shareholders indicated that the Board had recovered only Sh77 million from debtors between 2024 and 2026.
During the Special AGM meeting last week, shareholders agreed to establish and register the Kenya Federation of Savings and Credit Co-operatives (KEFESCCO), setting the stage for a new umbrella body to represent the interests of SACCOs.
By Wangari Ndirangu
