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Fired Kuscco bosses took Sh192m insider loans
Kenya Union of Savings and Credit Co-operatives (Kuscco) centre in Nairobi on March 11, 2025.
Dismissed executives and directors of the Kenya Union of Savings and Credit Co-operatives (Kuscco) held insider loans worth Sh192.8 million from the unregulated institution at the time of their exit, the Cabinet Secretary for Co-operatives and Micro, Small and Medium Enterprises Wycliffe Oparanya has disclosed.
The insider loans were among the items flagged in a forensic audit by PricewaterhouseCoopers (PwC) that revealed financial impropriety at the Saccos union that put Sh13.3 billion worth of depositor funds at risk of loss.
Mr Oparanya outlined the loans in a statement responding to queries raised by Busia Senator Okiyah Omtatah.
He said that former Kuscco chief managing director George Ototo held the largest loan at Sh103.11 million. Former finance manager George Owino had borrowed Sh17.98 million, while former internal auditor Kenneth Kimaiyo took loans worth Sh9.5 million.
Sh7.8 million
Among the directors, David Ogega was listed as owing Sh20.58 million, David Moyia (Sh13.57 million), Andrew Okwach (Sh7.8 million) and Wilfred Aima Sh7.62 million.
Other dismissed directors who held insider loans were Alfred Mlolwa at Sh6.39 million and Bernard Ngunjiri at Sh2.07 million, while former chairman George Magutu owed Sh4.14 million.
Top officials of KUSCCO from right George Ochola ,David Magutu Mwangi ,Jackline Atieno Omolo (advocate) and Mercy Muthoni Njeru at the Milimani law courts on February 13, 2025 over theft of Sh82.8m.
The PwC audit had noted that overall, Kuscco officials had tapped and defaulted on Sh489.2 million insider loans, with some breaching a policy that caps borrowings at up to five times a member’s deposits.
The financial impropriety at the Saccos union was initially exposed by an inspection done by the Commissioner for Co-operative Development after complaints by some Saccos that they were unable to access their term deposits at Kuscco when they fell due.
Unviable projects
The inspection found that there was falsification of records by top management to hide losses, misappropriation of funds and investments in unviable projects.
When the preliminary findings of the inspection report were shared with the Kuscco board in December 2023, it opted to send four senior executives including the managing director on compulsory leave pending investigations.
A subsequent stakeholder meeting convened by the commissioner then removed the entire board, replacing it with interim officials who then authorised the PwC forensic audit.
Some of the sacked officials, including Mr Ototo, Mr Owino, Mr Magutu, former Kuscco legal officer Jackline Atieno and former head of radio project Mercy Muthoni were subsequently arraigned on charges of theft of Sh82.8 million from the firm.
They all denied the charges.
