Reports have emerged that more than 100,000 Metropolitan Sacco members have lost Kshs 15 billion in savings between 2021and 2023.
The interim chair claims that the Sacco’s previous management is to blame for the financial catastrophe, citing severe mismanagement and unaccounted-for members’ savings. These accusations fit into a broader narrative of a sophisticated syndicate within the Sacco’s leadership, allegedly funneling off billions in a blatant act of corruption.
Metropolitan’s issues came to light three years ago when members’ complaints started to pile up. As they sought answers, many found themselves unable to access their own funds, leading to widespread outrage and prompting a deeper investigation into the Sacco’s operations.
Trouble for the Sacco escalated in April 2022 when the Commissioner of Co-operatives launched an investigation that exposed the deep-seated corruption within the institution. The probe uncovered significant irregularities, including fake dividend payments, shady lending practices, and manipulated financial records, casting a harsh spotlight on the embattled Sacco.
In one case, it was alleged that the interest income reported over the 24-year period from 1987 to 2021 amounted to Kshs 16.2 billion. However, the actual cumulative income for that same timeframe was estimated at only Kshs 6.8 billion, revealing a discrepancy of KShs 9.4 billion.
The fraudulent dividends were funded directly from the savings of Metropolitan Sacco members instead of actual profits. In one of the uncovered suspicious transactions, the Sacco’s premier loan facility was overstated by more than Kshs 7 billion, likely due to disbursements made to fake members.
At the same time, the Sacco’s management could not explain why they claimed the total assets were Kshs 28 billion, while external auditors found they were actually around KShs 14 billion.
The management deceived members with fake dividend payments, even though there were no real surplus reserves available to cover these payouts.
Additional irregularities involved Ksh 490 million in loans given to Sacco employees under dubious conditions and Ksh 176.9 million that disappeared from the Kisumu, Thika, and Kiambu branches.
Despite these findings, no prosecutions have occurred, and the stolen funds and assets are still missing. As a result, the Sacco’s interim board has called on the Directorate of Criminal Investigations (DCI) to take action, urging them to speed up the probe into the misappropriation of funds collected from Metropolitan Sacco members.
“If the loan book was reported to be Kshs 17 billion and now we have KShs 1 billion, it means the money that we are operating with today, the money with which we are giving services today is current money,” the board told Sacco members on August 15, 2024.
“We are not refusing the responsibility that the Sacco owes members this huge figure. But we have to make the right decision for posterity,” the board leadership noted.
