247 Saccos have been directed to cut their dividends over expected losses emanating from the multi-billion fraud that hit the Kenya Union of Savings & Credit Co-operatives (Kuscco). In addition to cutting dividends, the Saccos have also been directed to write off or set aside funds to cover the expected heavy losses.
This directive has been issued by the State Department for Co-operatives. According to the department, the provisions that have been ordered shall unveil the Saccos’ actual financial wellness as well as protect their liquidity.
“The provisions will roughly run for between one and five years based on the individual Sacco, the amounts involved and their financial muscle,” David Obonyo, the Commissioner for Co-operatives Development told a local newspaper.
The department has however kept a tight lid on the 247 Saccos with cash in Kuscco to prevent potential collapse that could emanate from members going for a withdrawal run out of fear.
“In most cases, it is the big Saccos who had invested in Kuscco. Though not all of them but a majority were the big Saccos who have surplus money to save,” Obonyo further stated.
Otieno Ototo: Man exposed in Sh13 billion Kuscco fraud demands Sh120 million
The multi-billion Kuscco fraud that is estimated at Sh13.3 billion was unearthed following an audit that was conducted by PricewaterhouseCoopers (PwC). The audit exposed theft, cooking of financial books, and conflict of interest that resulted in the mega loss of money. The audit revealed that Kuscco was left with liabilities of Sh17.7 billion against assets of Sh5.2 billion following the fraud.
