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Kenya police sacco lost Sh200m in Kuscco fraud
National Chairman of the Kenya National Police DT Sacco David Mategwa speaking during the Sacco’s Annual Delegates Meeting and the launch of the Strategic Plan 2025-2029 at the Serena Hotel in Nairobi on February 21, 2025.
The Kenya National Police Deposit Taking Sacco lost Sh200 million due to the fraud at Kenya Union of Savings and Credit Cooperatives (Kuscco), according to a new credit rating report.
The sacco, which recently fended off investigations by the Director of Criminal Investigations (DCI) following claims of embezzlement of funds by officials, will draw comfort in retaining its rating of A- with a stable outlook.
An A- rating implies that the institution has a high credit quality and a strong ability to meet its short-term obligations.
“All funds except Sh3 million have been recovered through member deposits and refunds and ICT processes have been updated and strengthened to mitigate this risk,” said GCR.
The police sacco had in May last year sent out a plea to 1,227 customers who had overdrawn their accounts to repay the excess, with the rating agency report signalling that the majority had heeded the call.
Police DT Sacco ranks third among 174 deposit-taking saccos on the basis of its asset base of Sh59 billion, with a loan book of Sh50 billion and deposits of Sh34 billion.
The sacco draws its 74,305 members from police and civil service.
Eight of its members had requested the DCI to probe the sacco on claims that its officials had defrauded it. The officials were able to stave off the investigations by arguing that any investigation should be carried out by the regulatory body Sasra, which has such powers.
Police DT Sacco increased its dividend payout by four percent to Sh624 million for the year ended December 2024, despite taking the financial hit from Kuscco. Most of the large saccos increased their dividend payout even as the government urged them to freeze payments and absorb the losses taken.
The realisation of the loss underlines the hit saccos are taking from the unscrupulous financial dealings at Kuscco. Officials of the umbrella body are accused of siphoning off an estimated Sh12 billion from deposits collected from its membership drawn from saccos across the country. The government has taken over part of Kuscco operations in an effort to recover some of the lost cash.
The fraud at Kuscco forced the saccos to make loss provisions based on their savings with the body. Kuscco, which is unregulated, has been dealing with saccos for many years despite earlier warnings that the institution was not being monitored by the Sacco Societies Regulatory Authority (Sasra).
