Metropolitan Sacco Heist: Decade-Long Theft of Teachers’ Hard-Earned Savings.
The Metropolitan National Sacco has been embroiled in controversy, making headlines for years due to allegations of fraudulent dealings that led to the loss of billions.
The ongoing investigation into former top management has exposed a financial scandal that left members suffering.
Among the affected are retirees who once trusted the Sacco as a secure place for their lifetime savings.
Now, an interim committee appointed by the Sacco Societies Regulatory Authority (SASRA) is set to manage the Sacco for three years in a bid to stabilize operations and recover the lost funds.
Life After the Collapse
In Kiambu County, a retired 68-year-old teacher deposited her savings in Metropolitan Sacco, she now lives hand-to-mouth, unable to access her money.
Since her retirement in 2016, she has depended on small-scale farming for survival. The former educator laments the situation, revealing that the last time she received a full dividend payout was in 2016.
The Sacco, which was once a leading financial institution for civil servants, began to deteriorate, and the following years saw no payouts or refunds of savings.
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Members like Austine Ochieng, a teacher at Kiambu Hill Crest Academy, joined the Sacco with high hopes in 2011. The Sacco enabled him to complete his university education by providing loans.
However, by 2018, he started experiencing difficulties withdrawing money due to cash flow issues. He would often receive only partial amounts or face long delays in accessing funds.
The situation worsened, with members being given only small portions of their requested loans, pointing to deeper financial troubles within the organization.
The Origins of the Fraud: A Massive Decline in Assets
Data from SASRA shows a dramatic decline in Metropolitan Sacco’s total assets, falling from KSh 10.02 billion in 2022 to KSh 1.07 billion in 2023.
This steep drop was largely due to mass member withdrawals amid concerns over financial mismanagement.
An audit revealed that the Sacco lost KSh 12 billion over the years, with irregularities pointing to the siphoning of funds by unscrupulous individuals within the organization.
A former employee who spoke anonymously disclosed that the financial embezzlement may have begun as early as 2010.
The Sacco hired two consultants for a new recruitment campaign and launched a loan product called the “Premier Loan,” which reportedly became a cover for fraudulent activities.
Irregularities in loan disbursement emerged, with accounts created using erroneous or fictitious information, allegedly leading to the loss of nearly KSh 4 billion by 2017.
Irregular Transactions and Manipulation of Accounts
Further allegations reveal that some top managers’ accounts were involved in suspicious transactions despite insufficient funds.
The manipulation reportedly involved the IT department, where overdrafts reaching millions were written off, and the transaction history was erased, making the money disappear without a trace.
Members frequently received their withdrawals in small batches instead of the full amount requested, suggesting a deliberate strategy to limit cash outflows.
The fraudulent schemes deepened between 2015 and 2017. Some funds remitted to the Sacco’s accounts were diverted to staff accounts, withdrawn in cash, and allegedly returned to the accounts office.
These complex financial maneuvers enabled officials to siphon off large sums unnoticed. The ATMs functioned irregularly, mainly around salary disbursements, raising further suspicion among members.
Mismanagement Across the Sacco Sector
The Metropolitan Sacco’s turmoil is part of a broader issue within the cooperative sector. Despite the growth in the number of Saccos and an increase in savings to over KSh 1 trillion, the number of member complaints surged to 715 in 2023.
This rising discontent signals the need for stronger regulatory measures to curb mismanagement.
In response, the Cabinet Secretary for Cooperatives announced a new bill and amendments to existing legislation aimed at strengthening Sacco regulations.
The government is pursuing court cases against those implicated in the Metropolitan Sacco fraud while coordinating with other agencies to recover the stolen funds.
The commissioner of cooperatives expressed determination to bring those responsible for corruption to justice.
Experts Warn of a Sector in Decline
Financial analysts have raised concerns about the Sacco sector’s future, questioning whether these institutions are still focused on growth or have clear business plans.
The alleged misappropriation of members’ contributions threatens the very foundations of the cooperative movement, which plays a crucial role in providing financial services to millions of Kenyans.
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As the government proposes stricter measures to safeguard cooperatives, the Metropolitan Sacco scandal serves as a stark reminder of the consequences of financial mismanagement.
The pursuit of justice and recovery of lost funds will be crucial in restoring confidence in Kenya’s Sacco sector.
Metropolitan Sacco Heist: Decade-Long Theft of Teachers’ Hard-Earned Savings.
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