Mismanagement of Saccos will come to an end, says Oparanya

The government will take stern measures to curb financial mismanagement in Saccos, Cooperatives CS Wycliffe Oparanya has said.

It will streamline operations with the important sector by implementing decisive measures to ensure accountability and integrity in Sacco operations.

The CS vowed that individuals found guilty of misappropriating Sacco members’ funds will face severe legal consequences, reinforcing the commitment to protect members’ investments.

Oparanya recently handed over a forensic audit report on the Kenya Union of Savings and Credit Cooperatives to the Inspector General of Police to launch immediate investigations into alleged financial irregularities.

“Moving forward, similar measures will be taken against any cooperative leaders who misappropriate or mismanage members’ funds. Let me be clear, this will no longer be tolerated,” Oparanya said.

Speaking during an industry forum in Mombasa, the minister said the cooperative movement remains a strong pillar of the Kenyan financial sector and a catalyst for economic transformation.

“Saccos are pivotal in financial inclusion, managing over Sh1 trillion in deposits.”

Cooperatives are strategically positioned to enhance financial inclusion, bridging segments of society that may otherwise be excluded from common financial services.

Unlike unconventional financial institutions that are largely confined to urban areas, Oparanya noted that Saccos extends their reach deep into grassroots communities, offering critical financial services to Kenyans living in remote areas.

The CS urged the institutions to capitalise on this strategic advantage by expanding their membership base, strengthening networks and enhancing competitiveness.

“For over fi ve decades, Kuscco has played an instrumental role in the Sacco sector through advocacy, capacity-building, and financial services. In 2024, members made the critical decision to restructure Kuscco to ensure that it meets its obligations and remains effective in its mandate,” Oparanya said.

The recent challenges at Kuscco served as a stark reminder of the importance of robust governance, stringent internal controls and sound financial management. He asserted that transparency, accountability and adherence to good governance must remain at the core pillar of the cooperative movement.

“Let us recommit to ethical leadership, financial prudence, and sustainable growth. The cooperative movement is a formidable force for economic and social transformation, and we must align our efforts with the Bottom-up Economic Transformation Agenda (Beta),” Oparanya said.

Kuscco national chairman David Mategwa emphasised on the need to focus on the new strategic direction after revelations of financial misappropriations in the umbrella Sacco body.

Mategwa affirmed his team was diligent in ensuring that the lessons and insights from the forensic audit were acted upon swiftly and decisively.

He confirmed the report had been submitted to all relevant authorities including the CS Cooperatives and MSMEs, Inspector General of Police, Ethics and Anti-Corruption Commission, Office of the Director of Public Prosecutions, the Assets Recovery Agency and the Directorate of Criminal Investigations for the necessary action.

“The recent comprehensive forensic audit that was conducted has provided us with invaluable insights into our operations. This proactive step has illuminated areas for strengthening and improvement and, as your interim board, we embrace these fi ndings as opportunities for growth and enhanced effi ciency,” Mategwa said.