58 Saccos Face Auction After Defaulting on KUSCCO Loans 

Hello and welcome to the Money News Roundup. Today, we’re covering the auction of 58 saccos that have defaulted on KUSCCO loans. We also cover the cancellation of the Kiambu Road tender and the auditor's concern for NTSA.

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‍Saccos Risk Auction After Failing to Pay KUSCCO Loans

58 saccos are at the risk of being auctioned after defaulting on loans they took from the Kenya Union of Savings and Credit Cooperatives (KUSCCO).

As reported in the Business Daily, the saccos had taken loans amounting to Ksh1 billion from the union in the last 20 years.

Due to the recent fraud and efforts to revive KUSCCO, the government is taking measures to ensure that the defaulting saccos repay their loans.

Already, the Commissioner of Cooperative Development, David Obonyo, wrote to the affected saccos asking them to meet their loan obligations.

Some of the affected saccos include Kencom Sacco (Ksh377.5 million), Nacico Sacco and its sister entity Nacico Investment Co-op (Ksh358.01 million), and Maseno University (Ksh106.43 million).

Others are Stegro (Ksh68.58 million), Umowa (Ksh49.07 million), Kakamega County Maendeleo (Ksh44.93 million), Sonygar (Ksh43.79 million), Migori Teachers (Ksh35.76 million), Malindi Biashara (Ksh35.05 million), and Lamu Teachers (Ksh23.92 million).

Saccos from the western part of Kenya top the list with Ksh325.04 million defaults, followed by Rift Valley (Ksh95.82 million), Mount Kenya (Ksh80.42 million), and Coast (Ksh77.36 million).

This move is set to affect members of the saccos as the entities that have defaulted are banned from paying dividends.

KUSCCO recently came to the spotlight after an audit report exposed a Ksh13 billion scandal that involved key officials of the union.

Read more in the Business Daily. 

Auditor General Issues Warning After Kenya Railways Defaults on Ksh34B SGR Loans

Auditor General Nancy Gathungu has issued a warning to Kenya Railways, stating that the corporation risks operational interruptions due to its failure to settle Ksh34.3 billion in loans, primarily from China Exim Bank, leading to accrued interests and penalties.

As reported by the People Daily, Gathungu’s report highlights that the corporation was facing penalties amounting to Ksh5.3 billion. Meanwhile, the corporation was also facing Ksh28 billion best arising from interests.

She emphasized that these were avoidable expenditures that could have been prevented had the loans been serviced on time.

Beyond the defaulted loans, the audit also exposed irregularities in Meter Gauge Railway (SGR) ticket payments. Issues include customers not paying, difficulty confirming all passengers were ticketed due to congested trains, and concerns over mobile money payments and receipts.

NTSA's Smart License Initiative Under Scrutiny

In another audit report, Auditor General Nancy Gathungu has put the National Transport and Safety Authority (NTSA) on the spot over the low uptake of smart driving licenses.

In Gathungu’s report, covered by the Business Daily, NTSA has only printed 1.6 million DLs, yet the National Bank of Kenya (the contractor had supplied 5 million cards.

Over 500,000 cards are reported to be in the stores, even as the auditor highlighted that the authority was not doing much to increase the uptake of the cards.

"Further, 572,674 cards valued at Ksh176,269,057 are still in the Authority's store after a total of 1,750,000 сагds were returned to the supplier to reduce un-invoiced stock earlier delivered. The uptake for the cards is still low, and Management did not demonstrate efforts to improve the situation," read the report in part. 

Why Nairobi Water Boss is Against the Installation of Smart Meters

The People Daily is also reporting that Nairobi Water Managing Director Nahashon Muguna has advised against the adoption of smart water meters.

Muguna claimed that mechanical meters, currently used by most Nairobi residents, were more practical and affordable. In particular, he highlighted the cost disparity. For instance, he reported that a mechanical meter costs around Ksh3,500, while a smart meter ranges from Ksh15,000 to Ksh20,000. 

The MD argued that given water's low price, it would take 20 to 30 years to recover the investment in smart meters.

Furthermore, he questioned the value of a marginal accuracy gain (mechanical: 3-5%; smart: 0.5-1%), suggesting it doesn't justify the substantial financial outlay. Muguna also warned that the transition would primarily benefit foreign manufacturers, be detrimental to local jobs, and to Kenyan consumers. 

KeNHA Cancels Tender for Dualing of Kiambu Road 

The Kenya National Highways Authority (KeNHA) has cancelled the tender for the expansion of the Pangani–Muthaiga–Kiambu–Ndumberi Road.

KeNHA made the announcement through a gazette notice on My Gov. However, the authority did not explain why the tender was cancelled a week after it was announced.

Last week, KeNHA announced a financing commitment from China’s Export-Import (EXIM) Bank. Consequently, Chinese contractors were invited to submit bids for the project.

PSC Announces 4,000 Paid Internships for Affordable Housing Program

The Public Service Commission (PSC) has announced a vacancy of 4,000 interns under the Affordable Housing Program.

Among the available slots are architecture (300), civil engineering (200), construction management (250), and electrical engineering (200), among others.

To be considered for an internship position, successful candidates must hold a Bachelor’s degree or a Diploma in one of the advertised fields. Candidates must also have graduated no earlier than 2018.

Read more on the application process here (pg 44).