Leaders of savings and credit cooperative societies (SACCOs) have been urged to prioritize dialogue over litigation in their efforts to recover funds from the Kenya Union of Savings and Credit Co-operatives (KUSCCO).
Speaking during the opening session of the 11th SACCO Leaders Convention in Mombasa, KUSCCO National Chairman David Mategwa appealed to member societies to embrace negotiation, warning that protracted court battles could derail ongoing reimbursement efforts.
“Don’t run to the courts; come to the negotiating table first,” Mategwa told leaders. “Litigation will only disrupt the momentum of repayment.”
KUSCCO is currently implementing a repayment plan to refund SACCOs following a financial scandal last year that exposed widespread misappropriation of funds. The crisis led to the removal of the previous management and triggered intense regulatory scrutiny, momentarily eroding confidence within the cooperative movement.
According to Mategwa, the new leadership has already reimbursed Sh365 million to affected SACCOs and is committed to making further payments as recovery efforts progress.
“We promise to continue repaying as recovery continues,” he said, noting that the new board’s primary focus is to restore the Union’s credibility and financial stability.
An Appeal for Dialogue
In a direct address, Mategwa made a plea to SACCOs that have already initiated legal action against the Union.
“For those who have already gone to court, my humble request is this: why not take the honorable path and sit with the KUSCCO leadership to find a way forward?” He asked.
He cautioned that aggressive legal action could undermine the collective recovery process, explaining that the Union’s ability to refund members depends on an orderly restructuring and the successful recovery of assets.
“You know very well that the funds will not be available if we do not complete the restructuring currently underway,” he said.
Mategwa further urged SACCO leaders to present reconciled, up-to-date financial records to facilitate the smooth verification and settlement of claims.
“Come and provide clear evidence through your accounts. Update your records so that we can verify the figures and pay your money back,” he urged.
He acknowledged that while some SACCOs have successfully complied with verification requirements and recovered their funds, others continue to struggle with documentation and reconciliation issues.
“Some have found these verification questions difficult to answer, while others complied and have already recovered their money,” he noted.
Restoring Confidence
The scandal that rocked KUSCCO last year sent shockwaves through Kenya’s cooperative sector, which manages billions of shillings in member savings. As the national apex body, KUSCCO is central to the sector’s liquidity management, advocacy, and training services.
The crisis highlighted governance weaknesses and heightened concerns regarding oversight and accountability. Consequently, the current leadership faces the delicate task of restoring trust while ensuring that financial recovery does not destabilize member institutions.
Mategwa told leaders that rebuilding KUSCCO’s “lost glory” is the board’s top priority.
“Our focus now is to reclaim the Union’s reputation,” he said. “We must rebuild confidence among our members and partners.”
He emphasized that unity is essential for the movement’s long-term sustainability, particularly as SACCOs face pressure from tightening regulations, rising loan defaults, and increased competition from commercial banks and digital lenders.
The week-long convention brought together SACCO leaders from across the country to deliberate on governance reforms, risk management, and sector resilience.
