The High Court in Nairobi has struck out an insolvency petition seeking the liquidation of the Kenya Union of Savings and Credit Co-operatives Limited (Kuscco).
The apex, a key sector player, has been struggling for several years with mounting debts and accusations of mismanagement, leaving members facing billions in losses, and the government has cancelled its registration, with a replacement apex being lined up.
One of the affected saccos had brought its own effort to liquidate the apex, but Justice Rhoda Rutto ruled that the Insolvency Act does not provide the legal basis for winding up a co-operative society, upholding a preliminary objection by Kuscco.
On that basis, she rejected a petition filed by Rupsa Regulated NWDT Sacco Society Limited, saying this had been improperly brought under the Insolvency Act.
She said that as a co-operative society registered under the Co-operative Societies Act, Kuscco is governed by the specialised statutory framework under that law, and not the general corporate insolvency regime.
Rupsa had brought its petition citing an alleged unpaid demand of about Ksh108.85m (£634,300 US$840,000), alongside financial records showing liabilities of approximately Ksh17.7bn (£103m, US$136.6m), against assets of about Ksh5.2bn (£30m, US$40m).
The judgment comes after Kenya’s commissioner for co-operative development, David Obonyo, appointed Waithaka Ngaruiya of Waithaka and Associates to oversee the liquidation of Kuscco for a period not exceeding one year.
Ngaruiya replaces three State Department for Co-operatives officials who had earlier been appointed to handle the process.
Meanwhile, fallout from Kuscco’s collapse continues, with Sacco Review reporting that savings and credit co-operatives (saccos) which had invested shares and deposits with Kuscco have set aside billions as they face losses tied to their investments in the apex.
The government announced that the affected saccos have made provisions for funds in line with applicable reporting standards.
The outstanding balance reported by saccos in Kuscco now stands at Ksh7.76bn, down from the previously reported Ksh16.1bn.
“Although painful, this is a necessary and prudent reporting decision,” said cooperatives and MSMEs development cabinet secretary Wycliffe Oparanya.
But Oparanya has also released figures pointing to healthy signs for the wider sacco economy.
The Sacco Supervision Report 2025 shows that nearly half a million Kenyans joined a sacco last year, lifting total membership to 7,875,000.
Total assets for the sector grew 12.5% from Ksh1.076tn to Ksh1.210tn (£7bn, US$9.34bn). Deposits grew 11% to Ksh832bn (£4.85bn, US$6.42bn), and loans to members rose 12% to Ksh949bn (£5.53bn, US$7.32bn).
Oparanya said this showed the “transformative impact of saccos in improving livelihoods and driving Kenya’s socioeconomic development”, enabling farmers to invest in production, parents to fund education, families to buy homes, and people to launch businesses.
