Treasury Launches Major Shake-Up of SACCO Oversight After KUSCCO Scandal as World Bank-Backed Review Begins
The National Treasury has launched a major review of Kenya’s supervision of Savings and Credit Cooperative Organisations (SACCOs), signalling fresh efforts to tighten oversight of the multi-billion-shilling sector following growing concerns over governance failures exposed by the KUSCCO scandal.
In a Request for Expressions of Interest issued under the World Bank-funded Supporting Access to Finance and Enterprise Recovery (SAFER) Project, the Treasury announced that it is seeking to recruit an independent consultant to review and strengthen the country’s Risk-Based Supervision (RBS) framework used by regulators overseeing SACCOs.
The move comes as the government seeks to restore confidence in Kenya’s cooperative financial sector, which serves millions of members and manages billions of shillings in savings and loans. The planned reforms are expected to improve regulators’ ability to identify financial risks early, detect governance weaknesses and intervene before institutions face serious financial distress.
According to the Treasury notice, the consultant will undertake a comprehensive five-month review of the existing Risk-Based Supervision Manual, examine weaknesses within the current regulatory framework and recommend improvements aligned with international best practices in financial supervision.
“The assignment will include reviewing the supervisory policy framework and revising the current Risk-Based Supervision Manual,” the Treasury said in the procurement notice.
Beyond rewriting the supervisory framework, the consultant will also be responsible for training technical officers and regulators on the revised risk-based supervision model to strengthen their capacity to identify, monitor and manage emerging risks within SACCOs.
The review will also involve benchmarking visits to countries considered global leaders in regulating SACCOs, credit unions and microfinance institutions, allowing Kenyan regulators to study successful supervisory models and adopt proven international practices.
As part of the assignment, the consultant will further support supervisory authorities in conducting both off-site financial analysis and on-site inspections—critical tools used to evaluate the financial health, governance standards and regulatory compliance of SACCOs operating across the country.
The review is being implemented under the Supporting Access to Finance and Enterprise Recovery (SAFER) Project, a five-year programme financed by the World Bank that aims to expand financial inclusion while supporting the recovery and growth of Kenya’s micro, small and medium-sized enterprises (MSMEs).
According to the Treasury, the programme seeks to improve access to affordable finance by promoting financial innovation, reducing lending risks for MSMEs and strengthening institutions responsible for regulating the country’s financial sector.
To qualify for the consultancy, applicants must demonstrate extensive experience in risk-based financial supervision, with expertise in SACCOs, credit unions or microfinance institutions considered an added advantage.
Candidates are also expected to possess experience in training supervisory authorities on risk assessment methodologies, alongside a strong understanding of Kenya’s financial system and regulatory practices across African markets.
The Treasury has set Thursday, August 6, as the deadline for submitting expressions of interest, after which the successful consultant will begin work on reforms expected to strengthen regulation, improve accountability and enhance financial stability across Kenya’s SACCO sector.
The review comes against the backdrop of heightened scrutiny following the KUSCCO scandal, which exposed serious governance, accounting and financial management failures within the umbrella body for SACCOs. The revelations sparked widespread concern over regulatory oversight and renewed calls for stronger supervision to safeguard the savings of millions of cooperative members across the country.
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