The Kenyan government has launched a formal investigation into the operations of the KUSCCO Housing Co-operative Society Limited following member complaints about governance and financial management. This move aims to enhance accountability in the cooperative sector amid recent scandals. The inquiry will review by-laws, finances, and management conduct.
In response to growing concerns from members, the Kenyan government has authorized an official inquiry into the KUSCCO Housing Co-operative Society Limited (KHC), a key entity supporting savings and credit cooperatives (SACCOs) with housing and property services. The probe, detailed in a gazette notice, targets internal operations, financial oversight, and governance practices, prompted by requests for greater transparency.
The investigation draws authority from sections 58 and 73 of the Co-operative Societies Act (Cap. 490). As stated in the notice signed by Commissioner for Co-operative Development David Obonyo: "Whereas members of KUSCCO Housing Co-operative Society Limited (CS/No. 15277) have requested for an inquiry into their Cooperative and whereas I am of the opinion that an inquiry be carried out… to look into the by-laws, working and Financial Conditions; and the conduct of the present or past management committee…" This underscores the need to address potential irregularities in leadership and finances.
Leading the effort are Assistant Commissioner for Co-operative Development Fondo Nzovu and Senior Co-operative Auditor John Kariuki Kinyanjui, both based at Nairobi Headquarters. They must begin the review within 15 days of the notice's publication on November 29, 2025, with details on schedule and venue to follow. Member SACCOs are instructed to assist fully, including providing documents for examination.
KHC originated as the KUSCCO Housing Fund in 1996 but has faced scrutiny alongside the parent KUSCCO, which encountered a Ksh15 billion financial crisis earlier in 2025 and allegations of mismanagement. These issues have eroded trust, leading to parliamentary action. In July 2025, Majority Leader Kimani Ichung'wah introduced the Sacco Societies (Amendment) Bill, 2025, to strengthen regulation of central liquidity and shared services among secondary SACCOs like KUSCCO.
The inquiry seeks to rebuild confidence by clarifying operational standards, potentially influencing broader reforms in Kenya's cooperative sector.