Government cancels KUSCCO registration as the SACCO liabilities hit Ksh17B
Government cancels KUSCCO registration as the SACCO liabilities hit Ksh17B
The government has cancelled the registration of the Kenya Union of Savings and Credit Co-operatives (KUSCCO) and ordered its liquidation following liquidity challenges that affected its ability to achieve its objectives.
According to a Gazette Notice published on August 31, 2026, the decision was made under the Co-operative Societies Act after KUSCCO failed to achieve its objectives because of liquidity challenges.
KUSCCO members had earlier passed a resolution supporting the dissolution of the union under Section 61 of the Co-operative Societies Act, paving the way for the cancellation of its registration.
Following the resolution, the Commissioner for Co-operative Development cancelled KUSCCO’s registration under Section 62(1)(c) and ordered that the organisation be liquidated.
Three officials from the State Department for Co-operatives have been appointed as liquidators. They will oversee the process for a period not exceeding one year and take custody of KUSCCO’s properties, books and other documents needed to complete the process.
The move comes amid wider efforts to restructure KUSCCO after years of financial and governance problems. In July 2026, the government had announced plans to transform the organisation into a federation as part of reforms aimed at improving governance, accountability and oversight in the SACCO sector.
Under that proposed structure, KUSCCO was expected to move away from its previous role as both a financial services provider and an umbrella body and instead focus on promoting good governance among SACCOs.
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The planned changes were also linked to proposed reforms under the Cooperative Societies Bill. The government said the reforms were intended to strengthen governance, accountability and sustainability across the co-operative movement.
KUSCCO had also come under scrutiny following a Ksh13.3 billion financial scandal that raised concerns over the safety of members’ savings and investments. The government subsequently assumed direct operational control of the organisation to oversee restructuring and stabilise its operations.
With registration now cancelled, the appointed liquidators will take control of KUSCCO’s assets and records as they work to wind up the organisation. Their mandate will run for a maximum of one year.
The liquidation order was issued under the Co-operative Societies Act, which gives the Commissioner for Co-operative Development powers to cancel the registration of a co-operative society and facilitate its liquidation in specified circumstances.
The Gazette Notice was signed on August 31, 2026, formally placing KUSCCO under liquidation and marking a major step in the government’s handling of the troubled co-operative union.
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