The government is considering winding up Metropolitan Sacco after a fresh inquiry found little improvement in the institution’s financial health over the past three years.
Commissioner for Co-operatives David Obonyo said the sacco was insolvent and could be wound up if efforts to secure a merger or acquisition failed.
Mr Obonyo said he would consult members and other stakeholders before deciding the way forward after receiving the full report of the 10-day inquiry conducted in June.
“The inquiry is complete, and the Sacco is insolvent. Nothing much has changed from what it was. There is not much improvement from the situation it was in,” Mr Obonyo said in a phone interview on Thursday.
Cooperatives commissioner David Obonyo.
Photo credit: File | Nation Media Group
“We have been giving it time to see whether it would come up, but the situation has not improved. Let me get the report, then I will see what to do.”
The commissioner said the preliminary findings suggested the sacco might not be revived, leaving winding up as an option if a merger or acquisition could not be secured.
“Winding up is one option; the other option will be merger, the other one will be acquisition. If they don’t get anyone to merge or acquire them, then the remaining option is winding up,” he said.
Mr Obonyo said the three options would be discussed with members, noting that the sacco had failed to improve despite efforts over the past two to three years.
The government ordered the fresh inquiry in June to establish the sacco’s financial position amid legal battles involving former officials who have been charged over alleged fraud at the institution.
The inquiry examined the sacco’s by-laws, financial status, sustainability and viability, according to Mr Obonyo.
Some of the 19 people accused jointly conspiring to defraud the Metropolitan National Sacco of over Sh14 billion, appear in Nairobi court on June 22, 2026. They were released on a bond of Sh200,000.
Photo credit: Billy Ogada | Nation Media Group
Mr Obonyo said the inquiry was intended to establish the sacco’s true financial position and help the government identify measures to protect members from further financial losses as the institution’s problems deepen and withdrawal claims continue to rise.
The sacco closed in 2024 with Sh7.41 billion in deposits and a Sh17.2 billion loan book, of which 98.99 per cent was in default, adding to its liquidity problems.
It is also facing pressure from members seeking to withdraw their savings. Some have turned to the Co-operative Tribunal, which has ordered the sacco to refund deposits, together with costs and interest from the date of filing in various cases. The orders have increased pressure on the institution’s liquidity as it struggles to meet withdrawal demands.
In May, 19 former officials were charged with nine counts, including alleged conspiracy to defraud the sacco of Sh14.9 billion on diverse dates between 2012 and 2021. The charges are yet to be determined in court.
The legal proceedings follow an earlier investigation commissioned in April 2022 into the sacco’s by-laws, working and financial conditions, management and the conduct of current and former directors. The institution was formerly known as Kiambu Teachers Sacco.
The 2022 inquiry followed complaints from members over several issues, including delays in refunding share capital after withdrawal, lengthy loan approval processes, non-functional mobile banking services and withholding of 50 per cent of dividends.
Metropolitan National Sacco on Koinange Street, Nairobi County.
Photo credit: File | Nation Media Group
The investigation also reported alleged irregularities involving dividend payments and lending. It said members had received dividend payments despite a lack of surplus reserves to support the distributions.
In 2023, the commissioner issued notices seeking to surcharge senior sacco executives over the alleged misappropriation of Sh7.2 billion through fictitious dividend payments.
The government has also been pursuing issues surrounding an untraceable Sh50 billion loan book and negative equity of Sh12 billion, according to the story’s records, developments that have heightened concerns among members about the sacco’s future.
“I don’t want to mention the figures because the only thing I wanted to know is the status of the company, which I have already told you, but the details of the report are what they are finalising,” he said.
He said winding up would not be the preferred outcome but could become necessary if no merger or acquisition partner was found. The commissioner said members would be involved in discussions before any final action is taken.
