The Lower Eastern Times Opening The Third Eye
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Afya Sacco has officially written off Sh361.6 million lost in failed investments linked to the Kenya Union of Savings and Credit Co-operatives (KUSCCO), marking one of the most significant financial setbacks resulting from the scandal that rocked Kenya’s cooperative sector.
The loss was disclosed in Afya Sacco’s consolidated financial report for the year ending December 31, 2024. The Sh361.6 million was classified under receivables as a non-recoverable loss due to the failed investment schemes involving KUSCCO.
This write-off significantly impacted the Sacco’s financials, pushing its total financial and operating expenses to Sh1.35 billion in 2024, up from Sh1.17 billion in 2023.
The KUSCCO scandal, which caused widespread damage across the cooperative movement, resulted in heavy losses for many Saccos due to alleged mismanagement and poor investment decisions by the union. Afya Sacco was one of the hardest-hit institutions.
Despite the setback, Afya Sacco reported a rise in net interest and operating income to Sh1.51 billion in 2024, compared to Sh1.37 billion in the previous year. However, the Sacco saw a sharp decline in interest income from loans and advances, which dropped from Sh2.3 billion in 2023 to Sh1.6 billion in 2024.
The financial report also showed a reduction in various expenditures. Personnel expenses amounted to Sh511 million, while administrative costs stood at Sh139 million. Governance costs were cut to Sh150 million from Sh225 million, and marketing expenses saw a significant drop from Sh50 million to just Sh13 million.
The financial fallout from the KUSCCO scandal has highlighted the vulnerabilities of SACCOs to systemic mismanagement, placing pressure on the sector to implement reforms to safeguard members’ savings.
In response, Co-operatives and MSMEs Development Cabinet Secretary Wycliffe Oparanya recently established a special task force to oversee sector-wide reforms and asset recovery efforts, aiming to restore trust and financial stability within Kenya’s cooperative movement.
