The government has cancelled the registration of the Kenya Union of Savings and Credit Co-operatives (KUSCCO) and ordered its liquidation, formally setting in motion the winding-up of the troubled umbrella body after it failed to meet its objectives due to liquidity challenges.
In a Gazette Notice dated August 31, Commissioner for Co-operative Development David K. Obonyo said the decision was made under the Co-operative Societies Act after KUSCCO members resolved to dissolve the organisation.
“Now therefore pursuant to section 62 (1) (c), I cancel the registration of the KUSCCO and order that it be liquidated,” he said.
The cancellation follows a resolution by KUSCCO members to dissolve the union under Section 61 of the Act, bringing its registration as a co-operative union to an end.
Obonyo has appointed three officials from the State Department for Co-operatives to oversee the liquidation process for a period not exceeding one year.
They are 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.
The appointed liquidators have been given authority to take custody of KUSCCO’s property, books and other documents they consider necessary to complete the process.
Their mandate will include taking control of the union’s assets and records as they oversee the winding-up of the organisation within the one-year period set by the Commissioner.
The decision comes after years of financial and governance difficulties at KUSCCO, including concerns over its ability to safeguard members’ savings and investments.
The union had previously come under scrutiny over a Sh13.3 billion financial scandal, which raised questions about the management of funds and the financial position of the organisation.
The government later took direct operational control of KUSCCO as part of efforts to oversee its restructuring and stabilise its operations.
In July, the government announced plans to transform KUSCCO into a federation as part of wider reforms aimed at improving governance, accountability and oversight in the SACCO sector.
Under the proposed arrangement, KUSCCO was expected to move away from its previous dual role as both a financial services provider and an umbrella organisation for SACCOs.
Instead, the restructured body was expected to focus on promoting good governance among SACCOs.
The proposed changes were also linked to reforms under the Cooperative Societies Bill, which the government said were intended to strengthen governance, accountability and sustainability across the co-operative movement.
However, the latest Gazette Notice now formally sets the liquidation process in motion, with the three appointed officials taking charge of KUSCCO’s property, books and other records required for the exercise.
The cancellation of its registration effectively ends KUSCCO’s status as a registered co-operative union as the government moves ahead with wider reforms targeting the SACCO sector.