A Nairobi-based savings cooperative is racing against time to sell land and secure a foreign loan to settle a Sh183 million debt by the Kenya Union of Savings and Credit Cooperatives (Kuscco), after a tribunal granted it three months to present a repayment plan.
The Cooperative Tribunal ordered Kencom Savings and Credit Cooperative Society to negotiate with its creditor, Kuscco, and table a “reasonable payment plan” within 90 days.
In the dispute that highlights the financial strain facing some cooperatives, the tribunal also declined to lift the warrants of arrest against the Sacco officials, ruling they had not proved they were no longer in office, and instead suspended the warrants for three months to allow the Sacco to pursue a repayment plan.
The directive followed admission by the Sacco that it lacks liquid assets to clear the loan and must rely on asset sales and fresh borrowing to stay afloat.
Kencom borrowed Sh183 million from Kuscco, backed by deposits of about Sh78 million. It has repaid roughly Sh21 million, leaving a significant outstanding balance.
In filings before the tribunal, the Sacco said it currently has no attachable assets to settle the debt, forcing it to explore alternative financing options. Its chief executive told the tribunal the society is marketing land in Mavoko for sale and is in talks with its lender to allow disposal by private treaty.
The Sacco also disclosed it is pursuing a foreign loan, saying the process is at an advanced stage but requires more time to conclude. It further cited an ongoing dispute over a Runda property, now subject to a separate appeal, as part of its constrained financial position.
“We have started marketing the property to potential buyers and are hopeful of progressing with the matter,” the Sacco said in its affidavit.
The tribunal accepted the request, ruling that granting time would balance the interests of both parties.
“Suspending the warrants for three months is not prejudicial or unjust as we try to balance the competing interests and rights of all parties,” the tribunal said.
However, the reprieve came with pressure to act within strict timelines, as the matter will be mentioned in July to confirm compliance.
The case stems from enforcement proceedings initiated by Kuscco after judgment was entered against the Sacco over the unpaid loan.
The creditor had sought to execute the decree, including through warrants of arrest issued against individuals linked to the Sacco.
Some of the individuals challenged the move, arguing they were not officials at the time of the transactions and should not be held liable.
They also claimed they had not been properly served with court documents and only became aware of the case after warrants were issued.
But the tribunal declined to lift the warrants outright, saying the applicants had not proved they were not officials of the Sacco.
“It is the duty of the parties claiming that they are not officials of the first respondent, to prove that they are not the officials,” the tribunal said. “They haven’t done that, and as such, we are not persuaded,” it added.
The tribunal ruled the warrants would remain in place, but suspended them for three months alongside the repayment window granted to the Sacco.
