Former top officials of the Airports Sacco have defaulted on Sh49.99 million loans tapped from the organisation, a report by the supervisory committee revealed, raising questions over the credit risk management of the institution.
The report on the sacco, whose core membership is drawn from Kenya Airports Authority (KAA) employees, shows that recovery efforts have yielded little progress, even as it flagged weaknesses in the management of outstanding loans worth Sh50.04 million borrowed by current staff.
For the loans tapped by ex-staff, no amount was recovered in the year ended December 2025.
The committee warned that continued delay in the recovery of the loans exposes the sacco to ‘significant financial loss and erosion of members’ funds.’
The report shows that a former chief executive allegedly defaulted on a Sh26.96 million loan, followed by a former treasurer (Sh9.36 million) and a former chairman (Sh2.44 million). Other former staff of the sacco, which started in March 1994, have defaulted on Sh11.21 million loans.
‘The loans remain largely unrecovered and continue to pose a significant credit risk to the society,’ notes the report.
The disclosures point to the insider lending risks for saccos, especially where senior officials award themselves loans beyond what their deposits allow.
A similar case to Airports Sacco played out at Kenya Union of Savings and Credit Co-operatives (Kuscco) where Sh192.8 million insider loans to senior officials formed part of the heist that left the umbrella body for saccos insolvent to the tune of Sh12.5 billion.
The report adds that Airports Sacco has reported the former officials to the Co-operative Tribunal to try to recover the amount. The committee has further recommended exploring additional legal and recovery mechanisms and providing periodic progress reports to members on the status of recovery efforts.
The report shows that the current staff has borrowed Sh50.04 million, with the loans performing and fully guaranteed.
However, the supervisory committee has observed that some staff have tapped loans with a maturity period beyond their retirement age or contractual period, raising fears of a future wave of defaults when they exit.
‘The supervisory committee further notes that some insider loan facilities extend beyond the retirement age of certain board members and staff, while others extend beyond the contractual employment period of some borrowers,’ notes the report.
The committee adds that while the loans are guaranteed and performing, the sacco’s board and management should strengthen credit risk management and loan structuring policies to ensure repayment periods are aligned with retirement age, employment tenure and borrowers’ repayment capacity.
It wants the credit policy reviewed to allow only well-secured members with demonstrated repayment capacity to access loans beyond retirement age.
The Sacco Societies Act allows saccos to grant loans to their employees and board members on condition that the terms are the same as those applied to members.
The rules bar the employees or directors from participating in the approval process or being guarantors.
‘No director, officer, employee, or member of the board of a sacco society shall act as a guarantor of any person with respect to a loan advanced or credit facility granted to a person by that society,’ reads the Act.