In a bold move to stabilize its financial standing and support struggling credit cooperative societies (Saccos), the Kenya Union of Savings & Credit Co-operatives Ltd (Kuscco) is considering selling a majority stake in its insurance subsidiary and auction houses. This decision comes in the wake of a significant financial hit, with the company suffering a Sh13.3 billion heist under former management.
The potential sale of Kuscco Mutual Assurance, its insurance arm, and the auction houses is seen as a strategic effort to raise capital and refund Saccos affected by loan defaulters. In addition to offloading these assets, Kuscco has begun selling houses and land funded through its Kuscco Housing Cooperative (KHC), which had supported housing projects in areas like Kitengela and Kisumu. This subsidiary will also be discontinued.
According to the Cabinet Secretary for Cooperatives and Micro, Small and Medium Enterprises Development, Wycliffe Oparanya, the proceeds from these sales will unlock further funds for the Saccos and help streamline Kuscco’s operations. He emphasized that the company will narrow its focus to its core mandate of advocacy and training.
The restructuring will also pave the way for the creation of the Sacco Liquidity Fund (SLF), a new initiative under the Sacco Societies Regulatory Authority (Sasra). The SLF is expected to replace the current Central Finance Fund (CFF) and will use capital from the sales to continue funding Saccos.
Oparanya highlighted that the SLF will operate independently with its own board and CEO, ensuring efficient management and recovery of funds owed to Saccos. The proposed restructuring has already received government backing, with plans underway to establish a new nine-member board as the interim board steps down.
This transformative plan marks a pivotal moment for Kuscco, aiming to restore financial health and renew trust within the cooperative sector.
