The story of Metropolitan National SACCO reads like a fiction…

Established on February 10, 1977 as Kiambu Teachers Sacco, the financial entity has been making headlines in recent years due to the loss of billions of shillings, allegedly linked to fraudulent dealings.

Former top management officials are under scrutiny and some on the dock. But beyond the loss of the billions of shillings, former SACCO members have been left with only the hope that soon, if not later, they will get their lifetime savings deposited in what was once a stable and promising financial institution.

Kanunga, at the heart of the expansive Kiambu County, at the home of a 68-year-old retiree she is busy in the kitchen making porridge, the only meal she can afford to prepare for us. She is a former kindergarten teacher. In a smoky and not well lit kitchen, she braves it all to ensure that the sour porridge is well cooked.

Well, despite working for over 30 years to secure a comfortable retirement, she now leads a hand-to-mouth life. The mother of six blames her current misfortune on a financial institution, Metropolitan National SACCO. She agrees to an interview but insists on concealing her identity.

“I’m still fighting to have the reminder of my money left in the SACCO returned to me, and if they get to know I am the one sharing the details I am going to share, they might frustrate me more,” claimed the retired teacher.

Hanging the boots in 2016, the former educator now turned farmer depends on small-scale farming for survival.

She admits that the SACCO was one of the best financial institutions in the 90s, attracting a huge number of civil servants especially from the education sector.  It is in 2016 that the rains started to beat. It was during this year when she last received her full dividend paid out at 12% of her savings and since then, the Metropolitan National SACCO has never been the same.

“It is eight years since my retirement, my money is still there. Every year we are called in for meetings, what we keep telling the management is we want a refund of our money,” insisted the former Kiambu County employee.

Augustine Ochieng, the head teacher Kiambu Hillcrest Academy, is a member of the SACCO since 2011. He says that financial help from Metropolitan SACCO enabled him to complete his bachelor’s degree at the University of Nairobi. However, the SACCO’s financial situation has dwindled over the years.

“2018, that is when we started experiencing some hitches with the sacco. At some point you will get endless reasons that are not reasonable,” notes Ochieng

Data from the SACCO Societies Regulatory Authority (SASRA) indicates that total assets of Metropolitan SACCO decreased from KSh10.02 billion in 2022 to KSh1.07 billion in 2023. This was caused partly by members abandoning the SACCO, with further an audit report uncovering the loss of KSh12 billion. 

But Just what happened to the once thriving Savings and Credit Cooperative?

Uncovering details, through a former employee who requested anonymity for fear of their safety, revealing how billions were allegedly embezzled by former top executives. The siphoning is said to have begun as far back as 2010, raising serious questions about the governance and oversight within the SACCO during the said period.

A University of Nairobi finance graduate alleges that the SACCO’s financial embezzlement began when the SACCO hired two consultants to run a new member recruitment campaign. During this period, the Sacco also introduced a new loan product called the premier loan product, aimed at attracting more members.

This move, the graduate says, is suspected to have laid the groundwork for the misappropriation of funds, as irregularities in the disbursement of the loans emerged, suggesting that the product was being used as a cover for fraudulent activities by the former top management officials.

The former clerk at the SACCO reveals that even erroneously registered members — who, he alleges, were not real persons — were offered the loan product. He estimates that nearly KSh4 billion was lost before the premier loan product was halted in 2017 due to legal issues.

A web of fraudulent money transactions

Between 2012 and 2019, the former clerk further alleges that certain accounts, particularly those belonging to top managers, were able to perform successful transactions despite having insufficient balances. This was reportedly facilitated by individuals in the IT department. It is alleged that when the overdraft on an account reached millions of shillings, the debt would be written off and the transaction history erased, effectively making the money disappear without a trace.

“The overdrawing of accounts was done at the branch. A cashier would be commanded to give any amount of shillings. It would be debit to your account but the credit part would not reflect,” alleges the former metropolitan clerk.

According to revelations by the former employee, in the period between 2015 and 2017, officials became even more crafty. When money was remitted to the SACCO’s accounts, instead of being allocated to loans and refunds, some of the funds were diverted to several staff accounts. The money would then be withdrawn in cash and allegedly delivered to the accounts office, creating a complex web of fraudulent transactions designed to siphon off large sums without detection.

“ATMs used to work only during salary weeks, that is twice or thrice a week.”

The turmoil surrounding Metropolitan SACCO is not an isolated incident. Despite the SACCO Supervision Report of 2023 by SASRA showcasing a thriving sector with over a trillion shillings in savings and a membership growth to 6.84 million across the 357 regulated SACCOs, the number of complaints has surged. In 2023 alone, complaints rose to 715, indicating a growing discontent among members.

Gov’t intervention

Financial experts have now raised alarm over this trend.

In a bid to address these challenges, Cabinet Secretary for Cooperatives Wycliffe Oparanya has announced plans to strengthen SACCOs regulatory framework through a new cooperatives bill and amendments to existing legislation.

“It is unfortunate that SACCOs have lost billions. That is why we are coming with strict regulations,“ stated CS Oparanya.

As for the disgruntled former members of Metropolitan SACCO, The Commissioner of Cooperative Development David Obonyo has revealed that the government is exploring all possible ways to recover the lost funds.

“We are pursuing the matter in court but also we are also liaising with other investigating agencies to find out any other persons who are culpable of corruption. We are also working to recover the money,” Obonyo says.