The Kenya National Police Deposit Taking Sacco (Kenya Police Sacco) lost Sh200 million in the multi-billion fraud that rocked the Kenya Union of Savings and Credit Cooperatives (Kuscco). This has been revealed in a credit rating report by GCR Ratings agency which is based in South Africa.
“Fraud within Kuscco Limited resulted in the Sacco realizing an impairment of Sh200 million,” GCR said in its report. In addition to this loss, the report noted that Kenya Police Sacco customers also took advantage of a system glitch and withdrew Sh140 million more than their withdrawal limits.
“All funds except Sh3 million have been recovered through member deposits and refunds and ICT processes have been updated and strengthened to mitigate this risk,” the report further added.
The report nonetheless gave the Sacco a rating of A- which means that the institution has a high credit quality and a strong ability to meet its short-term financial and operational obligations.
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.
Saccos that have lost money in KUSCCO; the millions they had invested
After the scandal blew up in public, the State Department for Co-operatives directed up to 247 Saccos to cut their dividends over expected losses. In addition to cutting dividends, the Saccos were directed to write off or set aside funds to cover the expected heavy losses.
The department has however kept a tight lid on the 247 Saccos with money in KUSCCO to prevent potential collapse that could emanate from members going for a withdrawal run out of fear.
