Saccos Suffer as KERUSSU Dissolved
Savings and Credit Cooperative Societies (SACCOs), particularly those located in rural areas with a significant number of farmers among their members, are making huge provisions to cover losses incurred from the financially troubled Kenya Union of Savings and Credit Cooperatives (KUSCCO) Ltd and shares held in the now-collapsed Kenya Rural SACCO Societies Union (KERUSSU) Ltd.
The latest Deposit-Taking Sacco to publish its provisions for impairment of financial assets held by the two umbrella Unions is Kericho County-based Kenya Highlands SACCO.
“KERUSSU, which was the apex body for rural cooperatives has been dissolved. We are requesting to write off shares that we were holding in the Union at KSh 310,000 and make a provision for the same in the 2024 financial statements. We have also provided for KUSCCO shares amounting to KSh 4,042,558.00,” Mr Richard Mutai, Board Chairman, Kenya Highlands Sacco, told the Society’s delegates during their Annual Meeting.
Tower and Univision Saccos have also set aside millions as provisions for funds held at the union.
Mr Peter Njuguna, Sacco Societies Regulatory Authority(SASRA) Chief Executive Officer, in a letter to SACCOs, directed that those SACCOs that are exposed to financial assets held in KUSCCO and KERUSSU make impairment provisions in their financial statements.
The moribund Kenya Rural Savings & Credit Cooperatives Societies Union (KERUSSU) was registered in 1998 as the umbrella body organization for rural SACCOs.
The largely dormant KERUSSU drew its membership mainly from cooperative societies whose operations are based in rural areas.
Its members were mainly derived from institutions and establishments such as factories based in rural areas and/or process inputs mostly from the rural areas.
The Union was designed with the overall goal of contributing to an improved standard of living in the rural areas of Kenya through appropriate, efficient, and effective rural cooperative movement with the capacity to offer accessible and affordable financial services.
While the Union remained weak and ineffective, its designers planned to have KERUSSU act as a tool to empower and provide a platform to rural SACCOs while offering effective and efficient services to their members. One of the suspects in the KUSCCO scandal who was among those charged was a top manager at KERUSSU.
