The KUSCCO Housing Co-operative Society Limited (KHC) is facing fresh scrutiny after the government authorised a formal inquiry into its operations amid concerns from members about management and governance.
In a gazette notice, the government announced that an inquiry would be carried out to investigate the internal operations, financial management, and governance practices of KUSCCO, following requests from members seeking accountability.
The inquiry will also examine the housing co-operative's by-laws, working and financial conditions and the conduct of current and past management committees under sections 58 and 73 of the Co-operative Societies Act (Cap. 490) Laws of Kenya.
"Whereas members of KUSCCO Housing Co-operative Society Limited (CS/No. 15277) have requested for an inquiry into their Cooperative and whereas I am of the opinion that an inquiry be carried out… to look into the by-laws, working and Financial Conditions; and the conduct of the present or past management committee… in accordance with section 58 as read together with section 73 of the Co-operative Societies Act (Cap. 490), laws of Kenya," a notice signed by Commissioner for Co-operative Development David Obonyo read.
The government further named Assistant Commissioner for Co-operative Development at Nairobi Headquarters, Fondo Nzovu and John Kariuki Kinyanjui, Senior Co-operative Auditor at Nairobi Headquarters, to lead the inquiry.
Together, the pair will be required to commence the review within 15 days from the date of the notice. The schedule and venue will be communicated to members in due time.
Part of the reason the state is keen on conducting an inquiry is to restore accountability and provide clarity on the operations of KHC.
Member SACCOs have been directed to fully cooperate with the inquiry team, and all documents may be reviewed as part of the investigation.
Historically, the KHC has served as a critical support structure for SACCOs, focusing on housing and property matters. It was originally founded as the KUSCCO Housing Fund (KHF) in 1996.
However, in recent years, there has been growing criticism over governance practices and financial oversight of the main KUSCCO, raising the question of whether KHC was also facing similar administrative challenges.
In 2025 alone, KUSCCO was marred with allegations of financial mismanagement and irregularities in its use of member funds.
As a result, Members of Parliament in July tabled new proposals in Parliament aimed at tightening oversight and improving accountability in the sector.
The Sacco Societies (Amendment) Bill, 2025, sponsored by the Leader of the Majority in the National Assembly, Kimani Ichung'wah, sought to overhaul how liquidity and shared services are managed by secondary saccos such as the Kenya Union of Savings and Credit Co-operatives (KUSCCO).
Under the proposed changes, a new category called "Central Liquidity and Shared Services" has been introduced. This refers to the practice of pooling funds from multiple primary SACCOs under a central body, a model previously used by KUSCCO before its Ksh15 billion financial crisis earlier in the year.
