Ukaguzi Sacco flags KSh47m in loan defaults and slow KUSCCO recovery

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Ukaguzi Sacco had KSh47.03m in defaulted loans on its books at the end of 2025, and it has recovered only a sliver of the KSh50m it put into the Kenya Union of Savings and Credit Co-operatives (KUSCCO) in 2023, according to a report by its Supervisory Committee whose details emerged this week.

The report was presented to members at the Sacco’s 53rd general meeting on March 28, 2026. It gives a rare line-by-line look at how a mid-sized Sacco is coping with rising arrears and the fallout from the KUSCCO collapse, which has left many member Saccos chasing money they parked with the umbrella body.

How the KSh47m in defaults breaks down

The committee split the unpaid loans by how long they had been overdue as of December 31, 2025:

• KSh3.27m was classified as a loss, having gone unpaid for more than a year.
• KSh13.95m was classed as doubtful or substandard, with payments 91 to 360 days late.
• KSh29.81m was 31 to 90 days overdue.

“As at 31st December 2025, the total amount defaulted was Ksh.47,031,164,” the report said.

The biggest share is still in the earliest stage of arrears, which means much of it can be recovered if borrowers are followed up quickly. But the committee singled out the Sacco’s Ukash loans for high default rates and asked management to tighten credit scoring and eligibility rules for the product. Members who want to see how repayment terms change with loan size and period can compare them on our Sacco loan calculators.

KUSCCO repaid just 1.43% of what was due

The more worrying number may be the KUSCCO exposure. Ukaguzi received KSh756,705 from KUSCCO in 2025, which the committee said was 1.43% of the amount it expected. The board is still talking to KUSCCO’s management about the balance.

That matters because KUSCCO’s members voted in August 2026 to put it into voluntary liquidation. Reports at the time said Saccos were owed about KSh17bn, while its known assets could cover only about KSh5.4bn. If recoveries end up near that ratio, Saccos with deposits there would get back roughly a third of their money, though no final figure has been set for Ukaguzi.

Employers owe KSh98.85m in members’ savings

The report also flagged KSh98.85m in member contributions that employers had deducted but not sent to the Sacco by the end of 2025. Unremitted deductions are a common complaint across workplace Saccos. They delay the crediting of members’ savings, can hold up loan approvals that depend on deposit balances, and squeeze the cash a Sacco has to lend.

Loan book and income still grew

Despite the arrears, the Sacco kept growing. Its loan book rose 6.68% to KSh3.02bn, and new loans issued during the year edged up to KSh1.69bn from KSh1.68bn in 2024. Membership increased to 2,455 from 2,376.

Operating income came in at KSh510.9m, 31.5% above the KSh388.45m budget. Spending also overshot, reaching KSh398.36m against a budget of KSh375.37m.

The committee called for stronger risk management and oversight, and for a review of the Sacco’s tax exposure, including possible excise duty and withholding tax liabilities.

What it means for Sacco members

Ukaguzi’s numbers echo what many Saccos are reporting this year: growth in lending and income alongside stubborn arrears, delayed employer remittances and money stuck in KUSCCO. For members, the practical step is to read the supervisory and audit reports tabled at each annual general meeting, check that payroll deductions actually appear on their statements, and ask how much of the Sacco’s money is exposed to KUSCCO.

Borrowers can also protect their own access to credit by keeping repayments current, since Sacco defaults can be reported to credit bureaus. Our guide on how to improve your credit score in Kenya explains how that works, and you can find more free money tools on our tools page.