Cabinet Secretary for Co-operatives and MSMEs Development Wycliffe Oparanya, on Tuesday, May 12, 2026, appeared before the Senate Committee on Trade, Industrialisation and Tourism to provide an update on the recovery of misappropriated funds at the Kenya Union of Savings and Credit Cooperatives (KUSCCO) and reforms within the SACCO sector.

Appearing before the committee at Bunge Tower, Oparanya said KUSCCO currently serves more than 3,000 SACCOs across the country, with an estimated share capital of Ksh3 billion and mobilised deposits and savings amounting to about Ksh15.6 billion.

However, he noted that the union had experienced prolonged financial and governance weaknesses that exposed major gaps in its operations.

KUSCCO audit exposes major financial gap

The CS informed Senators that a forensic audit and reconstruction of accounts conducted by PwC between August and November 2024 established that KUSCCO had been reporting profits despite incurring significant losses over time.

“A forensic audit and subsequent reconstruction of accounts revealed that while the Union had been reporting profits, it was in fact incurring substantial losses, culminating in an estimated financial deficit of approximately Ksh12 billion,” Oparanya told the committee.

He warned that the financial crisis had negatively affected the liquidity position of member SACCOs and weakened confidence in the wider cooperative movement.

“This situation has had a direct and adverse impact on the liquidity position and confidence of member SACCOs, thereby posing a systemic risk to the broader cooperative movement in Kenya,” he added.

Recovery measures and ongoing investigations

Oparanya said the ministry had initiated several interventions, including forensic audits, debt recovery programmes, restructuring of operations, and legal action against individuals adversely mentioned in the audit findings. The report was also submitted to the Inspector General of Police to support ongoing multi-agency investigations.

The CS noted that over Ksh369 million had so far been refunded to SACCOs and members during the 2024–2025 period through property auctions, vehicle sales, and debt collection initiatives.

Despite the recoveries, he acknowledged that major challenges remain, including the historical Ksh12 billion deficit, ongoing court cases, delayed recoveries, and a Ksh1.2 billion tax dispute involving the Kenya Revenue Authority.

Oparanya also updated senators on Metropolitan Sacco Society Limited, stating that investigations by the Directorate of Criminal Investigations and related administrative and judicial processes are still ongoing.

SACCO reforms and legislative proposals

The cabinet secretary said the ministry is implementing reforms aimed at strengthening governance, enhancing accountability, protecting SACCO members, and improving financial inclusion within the cooperative sector.

“The reforms are intended to build a stronger, safer, better-governed and more competitive cooperative sector that protects members and contributes to Kenya’s socio-economic transformation,” Oparanya said.

Members of the Senate committee called for the fast-tracking of the Cooperative Bill currently before the Senate, noting that the proposed legislation would strengthen oversight, governance, and accountability in SACCOs and cooperative societies.

Senators also emphasised the need for a mediation committee to help build consensus and speed up the enactment process as the government seeks to restore confidence in the cooperative movement.