The Kenya Union of Savings and Credit Co-operatives Society (KUSCCO) Ltd is currently under investigation for alleged involvement in illegal deposit-taking business activities. Cabinet Secretary for Co-operatives and Micro Small and Medium Enterprises (MSMEs) Development, Simon Chelugui, has issued a directive to the Sacco Societies Authority (SASRA) to conduct an inspection of KUSCCO’s books, accounts, and records, in accordance with the relevant legislation governing savings and credit co-operatives (Saccos).
The directive to investigate KUSCCO follows information received by the Ministry from various sources, as well as submissions made by SASRA. Chelugui expressed concern that, based on the available information and extensive correspondence with the Sacco’s management, the organization seems to be engaging in regulated Sacco businesses without the required licensing or authorization as mandated by the Sacco Societies Act No. 14 of 2008 and its associated regulations.
“I note with concern that from available information and from your extensive correspondence with its Management, the Kenya Union of Savings and Credit Cooperatives Society Ltd (KUSCCO Ltd) appears to be carrying out and/or undertaking regulated SACCO businesses without being licensed and/or authorized to do so as required by the provisions of the SACCO Societies Act No. 14 of 2008 and the Regulations made thereunder,” wrote the CS in a letter addressed to SASRA CEO.
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Regulated Sacco business, as defined by the law, encompasses either deposit-taking Sacco operations that necessitate licensing or specified non-deposit-taking activities that require authorization. Under Section 49 of the Sacco Societies Act No. 14 of 2008, the Cabinet Secretary holds the authority to direct SASRA to inspect any Sacco society, along with its financial records.
As a result, Chelugui has instructed SASRA to conduct an inspection of KUSCCO and its financial documentation, ensuring compliance with the provisions of the Sacco Societies Act No. 14 of 2008, alongside the relevant sections of the Cooperative Societies Act as applied to Sacco societies.
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The findings of this investigation will determine whether KUSCCO Ltd has been engaging in regulated Sacco business in violation of the law. If this is the case, further steps will be recommended, which could include sanctions against KUSCCO Ltd and its directors. The goal is to ensure compliance with the SACCO Societies Act No. 14 of 2008 and safeguard the interests of the public.
