Kenya: Afya Sacco Writes Off Sh361mn Linked to Kuscco Investment Scandal

Nairobi — Afya Sacco Society has formally written off Sh361.6 million lost in the collapsed investments with the Kenya Union of Savings and Credit Co-operatives (KUSCCO), representing one of the largest financial hits linked to the scandal that shook Kenya's cooperative sector.

The amount was revealed in Afya Sacco's latest consolidated financial report for the year ending December 31, 2024.

Under the section on receivables, the SACCO listed the Sh361.6 million as a non-recoverable loss stemming from its involvement with KUSCCO's now-failed investment schemes.

This write-off played a major role in pushing the SACCO's total financial and operating expenses up to Sh1.35 billion in 2024, an increase from Sh1.17 billion in 2023.

The KUSCCO scandal, which sent shockwaves across the cooperative movement, saw multiple Saccos suffer massive losses due to alleged mismanagement and poor investment strategies by the union.

Afya Sacco ranks among the most severely affected institutions.

Despite the setback, Afya Sacco managed to post a net interest and operating income of Sh1.51 billion in 2024, up from Sh1.37 billion the previous year.

However, the Sacco experienced a sharp decline in interest income from loans and advances, which dropped to Sh1.6 billion from Sh2.3 billion in 2023.

The financial report also shows adjustments in spending.

Personnel expenses stood at Sh511 million, while administrative costs were Sh139 million.

Governance and marketing expenditures were notably reduced; governance costs fell to Sh150 million from Sh225 million, and marketing expenses dropped significantly from Sh50 million to just Sh13 million.

The financial blow from the KUSCCO fallout has underscored the vulnerability of SACCOs to systemic mismanagement.

The sector is now under pressure to implement structural reforms aimed at protecting members' savings.

In response to the crisis, Co-operatives and MSMEs Development Cabinet Secretary Wycliffe Oparanya recently launched a special KUSCCO committee of experts.

The task taskforce has been mandated to spearhead sector-wide reforms and oversee asset recovery initiatives in an effort to rebuild trust and financial stability across Kenya's cooperative movement.

Read the original article on Capital FM.