The crisis at Metropolitan Sacco has intensified as the government initiates a fresh inquiry into the institution's financial health. This comes amid increasing withdrawals, tribunal orders, and allegations of a Sh14.49 billion fraud by former officials. Commissioner for Co-operatives David Obonyo announced that the investigation aims to assess the Sacco's current financial status, sustainability, viability, and member activity. The inquiry is anticipated to last about 10 days.
Metropolitan Sacco, previously known as Kiambu Teachers Sacco, faces severe liquidity challenges. A growing number of members have withdrawn their deposits and secured orders from the Co-operatives Tribunal for refunds, including costs and interest. The Sacco ended 2024 with Sh7.41 billion in deposits against a Sh17.2 billion loan book. However, the loan book is heavily burdened by a reported 98.99 percent default rate, raising concerns about the institution's ability to meet its obligations to members.
The government is also pursuing former officials over an untraceable Sh50 billion loan book and negative equity of Sh12 billion. Nineteen former officials have been charged with conspiracy to defraud the Sacco of Sh14.9 billion between 2012 and 2021. An audit conducted in 2022 revealed alleged fictitious dividend payments, manipulation of financial records, irregular lending practices, and false dividend declarations, despite the absence of surplus reserves to support such payouts.
In 2023, the Commissioner for Co-operatives issued notices to surcharge senior Sacco executives for the alleged misappropriation of Sh7.2 billion through fictitious dividend payments. Metropolitan Sacco is also among five Saccos barred by the Sacco Societies Regulatory Authority (Sasra) from taking deposits earlier in 2026, restricting it to credit-only operations alongside Dumisha Sacco, Bi-High Sacco, Ol’Kaunsel Sacco, and Digital Media Sacco.
The new inquiry aims to determine whether Metropolitan Sacco's financial position has improved or worsened and what actions the government might take to safeguard remaining member funds. The outcome of this investigation will be crucial in deciding the future of the Sacco and the protection of its members' investments.