Former directors of the troubled Metropolitan National Sacco are under pursuit by the State over Sh50 billion untraceable loans.
New disclosures show that the Directorate of Criminal Investigations (DCI), the Commissioner for Cooperatives, and the Sacco Societies Regulatory Authority (Sasra) are now investigating how Sh50 billion loans issued at the sacco cannot be traced, even as the once profitable teachers’ sacco sank into insolvency.
“A multi-government approach has been adopted with the authority, Commissioner for Cooperatives Development, and the DCI in assessing long-term regulatory and administrative options, while pursuing former sacco officers implicated in instances of mismanagement,” Sasra said.
Metropolitan Sacco has been barred from taking deposits from members in 2026, in a bid to cushion depositors from further losses. Other saccos restricted to operate credit-only activities this year are Dumisha Sacco Society Ltd, Bi-High Sacco Society Ltd, Ol’Kaunsel Regulated Non-WDT Sacco Society Ltd, and Digital Media Regulated Non-WDT Sacco Society Ltd.
“This is in exercise of the authority’s supervisory and enforcement powers aimed at protecting new depositors or further loss of deposits by current depositors whilst allowing the sacco society to take appropriate recovery measures, including realisation of the outstanding assets to meet the current or maturing liabilities,” said Sasra.
Sasra says the restrictions will allow the saccos to pursue mergers, consolidations, or business restructuring strategies without taking on new or additional liabilities.
The regulator licensed 176 saccos to conduct deposit-taking business this year, with an equal number licensed to operate as Specified Non-Withdrawable Deposit-Taking Saccos.
The purge on Metropolitan Sacco leadership comes after the institution, which draws a majority of its membership from teachers and civil servants, was last year declared technically insolvent, as members voted to hire forensic auditors to probe a scandal that sent the once-dominant institution to its knees.
Sasra added that pending the outcome of investigations, “the sacco remains credit-only to safeguard members’ funds.”
Troubles started courting the Metropolitan National Sacco early last year when the Commissioner for Cooperatives declared it technically insolvent, revealing that the institution would require Sh7 billion to resume normal operations.
An investigation sanctioned by the State in 2022 unearthed questionable transactions at the sacco, including an overstatement of its premier loan facility by an excess of Sh7 billion due to suspected disbursements to non-existent members.
The investigation revealed that the Sacco management duped members with fake dividend payments despite non-existent surplus reserves, only to emerge that it paid the dividends from members’ savings.
Metropolitan National Sacco Ltd offices at Chai House along Koinange Street in Nairobi. Teachers complained that TSC was deducting their cash and handing to Metropolitan sacco against their will.
Photo credit: File | Nation Media Group
Reports tabled during the Sacco’s annual general meeting (AGM) in August last year revealed untraceable loans to the tune of Sh50 billion and a negative shareholder equity of Sh12 billion, as members voted to engage forensic auditors.
“The meeting discussed the financial status of the Sacco, highlighting a significant untraceable loan book asset of Sh50 billion and a difference between assets and liabilities of Sh12 billion. The proposal for a forensic audit was appreciated, with resources to be mobilised for the exercise,” the AGM resolutions stated.
The Sacco has been facing challenges, including insufficient liquidity and loan defaults, exposing depositors to possible losses in billions of shillings.
