A new management team at the Kenya Union of Savings and Credit Cooperatives (KUSCCO) seeks to restore the umbrella body to its former glory.
Selling assets and loan books
Among the measures they are willing to implement is selling off its loan book to willing financial institutions, enabling them to recoup Sh8.8 billion in 5 years.
The preceding management had embezzled and drained billions in cash from the members’ savings. To recover the money, Kuscco has to implement the difficult option of selling some of its businesses and assets.
They include non-revenue assets such as 32 vehicle units. The Board Chairman, David Mategwa noted the organisation trimmed employee numbers from 243 to 96 employees.
“We only have 96 out of 243. No dismissal has been issued to any staff that left. All of them have decided to resign…There are still some who will go,” Mategwa added.
The government has urged Kuscco to stick to its advocacy role due to the Sh13 billion embezzlement case surrounding it. The Group MD, Arnold Munene stated the case had a large, almost irreparable impact, especially on Sacco bodies.
Currently, the new management’s primary goal is to establish ways to recover principal members’ savings invested in the union. He asserted some funds could be recovered by selling some of Kuscco’s businesses, assets and loan books despite the government’s warning to brace for potential losses.
Saccos that have lost money in KUSCCO; the millions they had invested
“Most of our assets and what we are looking at are loans that we have given to our members (Saccos), mortgages that saccos or the public enjoyed under the Kuscco Housing Fund (KHF).”
“We have assets under the Kitengela Homes project, which today you cannot tell our members that within the next two months, we are going to recover X amount of loans because these loans are spread within a certain period, from three to 15 years for the mortgage,” Munene explained.
“We can even sell off these loan books to any financial institutions because what we want now is cash.”
KUSCCO’s 60 per cent stake to be sold
Moreover, the Sacco umbrella body is preparing to sell off a 60 per cent stake in Kuscco Mutual Assurance Limited.
“You cannot wake up today and get a strategic partner to do due diligence and make the payments immediately. It takes a while. So that is why we are telling Saccos to be patient; within the three years, we would have made good strides,” Kuscco’s Managing Director spoke during a roundtable held in Nairobi.
The strategy approach is straightforward, Kuscco will separate the principal amount, which stands at Sh8.8 billion, from the interest. In three years, the organisation is expected to recover Sh6.1 billion of this amount.
“We want to apologise because this has tortured so many people in our community. Not only that, because even the chief executives who are here have been bashed.”
