The Vanishing Sacco Scandal

Grab your cup! This one is piping hot from the co-operative corridors.

Turns out Kuscco, the umbrella body for savings and credit co-operatives, is chasing ghosts — literally. About 150 saccos borrowed over Sh1.3 billion through Kuscco’s Central Finance Fund (CFF) and then… vanished. No trace, no repayments, no explanations. Some didn’t even have deposits lodged with Kuscco to begin with. What’s worse? There’s now suspicion that a few of these saccos never even existed in the first place. Let that sink in.

According to a report by the Business Daily this week, the new leadership at Kuscco is now scrambling to verify if these saccos were ever real or if the loans were part of a larger scheme masterminded by the union’s former officials (the same ones caught up in a forensic audit bombshell by PwC that uncovered financial manipulation, forged auditor signatures, and phantom profits).

But beyond the drama of disappearing borrowers, this saga exposes something far more sobering: a systemic failure of internal controls and regulatory oversight. How does an umbrella body entrusted with billions allow loans to go out with no basic vetting of borrower existence? How does such a fund operate for years, disbursing money into the financial wilderness, without sounding alarm bells?

This wasn’t just mismanagement. It was an abdication of duty. A clear indication of how financial governance can collapse when institutions become bloated, unregulated, and insulated from accountability. That these loans are now unrecoverable means ordinary sacco members who entrusted their savings to Kuscco may end up footing the bill for this ghost chase.

The cautionary tale here isn’t just about fraud. It’s about the high cost of trusting institutions that grow faster than the systems meant to keep them in check. In the end, it’s the smallest savers who suffer the biggest losses. And the ghosts? They remain haunting.