This archive report was first published on 14 July 2019.
On July 14, 2019, Metropolitan Sacco, a savings and credit co-operative with over 100,000 members, found itself on the brink of collapse due to allegations of risky lending and ineffective accounting systems.
The sacco, which draws its membership from teachers around the country, had been struggling to meet the needs of its members, with many complaining that they could not access salaries or loans when channelled through the sacco's banking system.
According to investigators from the Sacco Societies Regulatory Authority, the sacco's precarious financial position was traced back to December 2018, when a high demand for deposit refunds could not be matched by its finances.
The sacco had also been struggling to service loans of Sh5 billion owed to two commercial banks.
Under the rescue plan, Cooperative Bank's consultancy arm has restructured the funding requirements to 'better manage the members' monthly loan demands as well as the overall liquidity flows aimed at a complete turnaround of the sacco.'
Cooperative Bank director Vincent Marangu stated that the corporate restructuring programme, which began in July 2019, would ensure the sacco has 'adequate working capital to support the members as well as improve the operational efficiency of the sacco.'
Metropolitan Sacco chairman Christopher Karanja expressed gratitude to Cooperative Bank for its support, saying 'We thank the Co-operative Bank for coming to our great support at such a critical moment.'
