SACCO MEMBERS FACE LOWER DIVIDENDS AS KUSCCO LOSSES HIT SH7.7 BILLION

Sacco members could receive lower dividends as institutions continue making provisions for billions of shillings lost through their investments in the troubled Kenya Union of Savings and Credit Co-operatives (KUSCCO).

The Sacco Societies Regulatory Authority (SASRA) says about Sh7.76 billion in KUSCCO investments remains to be fully provided for by affected Saccos. The provisions are expected to reduce surpluses available for distribution to members. 

The development comes after KUSCCO members approved the liquidation of the umbrella body in August 2026 following years of financial difficulties. KUSCCO had liabilities of nearly Sh17 billion, against known assets of about Sh5.4 billion, raising concerns over the amount Saccos can recover. 

Co-operatives and MSMEs Development Cabinet Secretary Wycliffe Oparanya said the outstanding exposure had fallen from Sh16.1 billion to Sh7.76 billion after affected Saccos made provisions.

SASRA has also urged Saccos to strengthen their capital rather than prioritise high payouts. In 2025, the average dividend on members' share capital fell to 10 per cent, from 10.46 per cent in 2024. 

The regulator has warned Saccos against using borrowed money to maintain dividends, saying payouts should be supported by actual performance and cash flows.

The KUSCCO crisis is therefore expected to continue affecting members as Saccos balance dividend payments with the need to rebuild reserves and absorb potential losses.