It will take effort to restore public trust in Saccos

The Sacco sector in Kenya is facing its most severe crisis in decades, and the Sacco Societies Regulatory Authority (SASRA) has a monumental task ahead: restoring public confidence in a system that has been the backbone of financial inclusion for millions of Kenyans.

Unfortunately, SASRA has become part of the problem, failing to address systemic issues that have led to widespread mismanagement and fraud. This is not just a financial scandal—it is an economic crime of the highest order, with devastating consequences for ordinary citizens and the economy.

Saccos have played a pivotal role. They have educated generations, funded homes, and empowered small-scale entrepreneurs. Before Equity Bank revolutionised banking with its bottom-up approach, Saccos were the only financial institutions catering to the mwananchi. Cooperative Bank, itself is a product of this cooperative model. For many Kenyans, Saccos are more than just financial institutions; they are a lifeline.

Yet, the sector is in turmoil. The KUSCO scandal, with its billions of shillings in losses, is a stark reminder of the rot within the system. Cooked books, weak internal controls, and greedy officials operating with impunity have become the norm. The fact that those directly implicated in the KUSCO scandal are out on bond, rather than facing swift justice, only deepens the sense of betrayal. This is a national disaster.

The problems extend far beyond KUSCO. Moi University Sacco, once a vibrant institution, is now struggling with a potential loss of over Sh4 billion of members’ savings. Metropolitan Sacco, established in 1977, faces similar challenges. Smaller Saccos, unable to secure action from SASRA, are left to deal with their challenges on their own. The regulatory body’s inaction and inefficiency and internally engineered fraud have left members frustrated and disillusioned.

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The human cost cannot be overstated. Many Kenyans who entrusted their savings to Saccos are facing financial ruin. The stress and anxiety caused by these losses are likely to lead to a surge in health issues, further compounding the tragedy. These are not just numbers on a balance sheet—they represent dreams and livelihoods of hardworking Kenyans. These are lifetime savings.

To restore trust, SASRA must undergo a complete overhaul. A thorough audit is essential, and those responsible for the current crisis must be held accountable. Leadership changes are needed not only within the affected Saccos but also within SASRA itself. Strengthening internal controls, improving transparency, and empowering members to hold their leaders accountable are critical steps. Whistleblower protections must also be established. Those who sidestepped their mandate must be brought to book swiftly.

The Sacco sector is too important to fail. It has built the wealth of this nation and empowered countless Kenyans. Restoring confidence in Saccos is not just a regulatory challenge—it is a national imperative. Only through decisive action can Saccos once again become engines of economic empowerment rather than symbols of betrayal.

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