Decade-Long Teacher Savings Theft-Metropolitan Sacco Heist
The Metropolitan National Sacco has been at the center of controversy for years, embroiled in a scandal involving the loss of billions of shillings due to alleged fraudulent activities. The financial turmoil has severely impacted its members, especially retirees who had entrusted the Sacco with their life savings. Investigations into the former management have exposed a massive financial scandal, leading to the appointment of an interim committee by the Sacco Societies Regulatory Authority (SASRA) to manage the Sacco for three years and attempt to recover the lost funds.
The Collapse’s Aftermath
In Kiambu County, a retired teacher, aged 68, deposited her life savings in Metropolitan Sacco, only to find herself struggling to make ends meet. Since her retirement in 2016, she has relied on small-scale farming for survival, as she has been unable to access her funds. The last time she received a full dividend payout was in 2016, and since then, the Sacco’s financial troubles have worsened, with members seeing no refunds or savings withdrawals.
Teachers like Austine Ochieng, who joined the Sacco with optimism in 2011, have also suffered. Ochieng used Sacco loans to finance his university education, but by 2018, he began facing difficulties in accessing his money. Partial withdrawals and delayed transactions became common, signaling deeper financial issues within the organization.
The Origins of the Fraud
SASRA data reveals that Metropolitan Sacco’s total assets plummeted from KSh 10.02 billion in 2022 to just KSh 1.07 billion in 2023. This dramatic decline stemmed from mass member withdrawals driven by fears of financial mismanagement. An audit uncovered a KSh 12 billion loss due to fraud, with irregularities suggesting that funds were siphoned off by unscrupulous individuals within the Sacco, with the misappropriation allegedly beginning as early as 2010.
In 2010, the Sacco hired two consultants and launched a loan product, the “Premier Loan.” This loan product later emerged as a cover for fraudulent activities, with irregularities in loan disbursements and accounts being created using false information. By 2017, nearly KSh 4 billion had been lost.
Manipulation of Accounts
Further allegations point to manipulation within the Sacco’s IT systems. Suspicious transactions were linked to some top managers’ accounts, where overdrafts reaching millions were written off, and transaction histories were erased. As a result, funds disappeared without a trace. Members often received withdrawals in small batches, suggesting a deliberate strategy to limit cash outflows.
Broader Sector Challenges
Metropolitan Sacco’s troubles reflect wider issues within Kenya’s Sacco sector. While the number of Saccos and member savings have grown, complaints about mismanagement surged, reaching 715 in 2023. The Cabinet Secretary for Cooperatives has since proposed a new bill to strengthen regulations and prevent further fraud.
The Metropolitan Sacco scandal serves as a stark warning of the devastating consequences of financial mismanagement, threatening the stability of the Sacco movement and the trust of millions of Kenyans who rely on these institutions for financial services.
