KUSCCO registration cancelled and union placed under liquidation - what it means

The registration of the Kenya Union of Savings and Credit Co-operatives (KUSCCO) has been cancelled and the union placed under liquidation following a decision by its members to dissolve the institution amid severe liquidity challenges.

The decision was formalised through a Gazette notice dated August 31, 2026, in which the Commissioner for Co-operative Development said KUSCCO had failed to achieve its objectives because of liquidity challenges.

Citing a resolution by KUSCCO members to dissolve the union pursuant to Section 61 of the Co-operative Societies Act, the Commissioner subsequently cancelled its registration under Section 62(1)(c) and ordered that the union be liquidated.

“WHEREAS KUSCCO Limited has failed to achieve its objects due to liquidity challenges,” the notice states.

CPA Peter Wanjohi Kiama, Habil Olembo Jesse and Mariam Adam Abubakar have been appointed as liquidators for a period not exceeding one year.

The three officials, drawn from the State Department for Co-operatives, have been authorised to take custody of KUSCCO’s properties, books and other documents considered necessary to complete the liquidation process.

CPA Peter Wanjohi Kiama is listed as Deputy Commissioner for Co-operative Development, Habil Olembo Jesse as Principal Co-operative Officer, while Mariam Adam Abubakar is identified as Deputy Chief State Counsel.

The liquidation order follows a financial crisis that had left KUSCCO facing significant liabilities and mounting pressure from SACCOs seeking recovery of funds invested with the union.

Forensic audits covering the period between 2013 and 2024 identified more than Sh6.5 billion allegedly siphoned through illicit loans, unauthorised cash transfers and fraudulent bookkeeping.

KUSCCO had also accumulated an estimated Sh11.6 billion deficit, with estimated realizable assets of Sh5.4 billion against liabilities exceeding KSh17 billion.

The scale of the financial exposure extended across the co-operative sector, with more than 247 individual SACCOs reported to have invested approximately Sh24.8 billion in KUSCCO’s deposit-taking facilities, including the Central Finance Fund.

The financial position made a fresh capital injection a central issue in efforts to revive the union. Approximately Sh14 billion would have been required to restore KUSCCO.

At the same time, legal pressure intensified, with KUSCCO facing 291 separate court cases from SACCOs seeking to recover funds and attach or auction its remaining properties.

The crisis also saw tribunal orders requiring KUSCCO to refund substantial amounts, including Sh489 million to Mhasibu SACCO and Sh162 million to Kenpipe SACCO.

On August 28, 2026, KUSCCO shareholders held a Special General Meeting at All Saints’ Cathedral in Nairobi, where they voted to dissolve the union rather than pursue further capital injection.

The members also agreed to establish a new entity, the Kenya Federation of Savings and Credit Co-operatives (KEFESCCO).

The government’s subsequent Gazette notice now places the formal responsibility for winding up KUSCCO on the three appointed liquidators.

The liquidation process is expected to involve taking control of the union’s assets, books and records before dealing with its outstanding affairs within the statutory period of one year.

Also, recovery efforts include the sale of assets, including vehicles and houses, as well as plans to dispose of KUSCCO’s 60 per cent controlling stake in KUSCCO Mutual Assurance to a strategic investor.

About Sh136 million is reported to have already been recovered through the sale of 32 vehicles and several houses, while KUSCCO has also been auctioning houses and land linked to mortgage defaults under its KUSCCO Housing Fund.