Metropolitan Sacco is facing mounting liquidity pressure as a surge in member exits forces the troubled institution to refund the withdrawing depositors following orders from co-operatives tribunal.
The sacco, which is pursuing its former officials on the back of an untraceable Sh50 billion loan book and negative equity of Sh12 billion, has left its members worried over the entity’s future, triggering exit applications.
A growing number of members seeking to withdraw their savings have turned to the Co-operative Tribunal to compel payment, with case records showing a consistent pattern of rulings in their favour.
Regulatory filings show the sacco closed 2024 with Sh7.41 billion deposits and a Sh17.2 billion loan book that had a default rate of 98.99 percent -adding to its woes.
Exits pressure
The co-operatives tribunal has been ordering Metropolitan Sacco to refund members their deposits alongside costs and interest from the date of filing, deepening the strain on its already stretched liquidity. The orders could see remaining members lose their deposits in the absence of loan recoveries.
Between January and April this year, the tribunal issued such orders in favour of 33 members, building on the 104 that were made against Metropolitan in 2025 and at least 49 in 2024.
In one of the latest cases ruled by the tribunal in April, Martha Muthoni Gachoya proved that she had saved Sh128,243 but the sacco had failed to refund the money after applying to exit.
The tribunal dismissed Metropolitan’s argument that customers were bound by a 2022 resolution of an annual general meeting that suspended payment of refunds to allow the sacco to achieve a sound financial position to accommodate refunds.
‘Indeed, the resolution was passed, but as we write the judgment neither shows if the resolution still stands if at all. The respondent’s (Metropolitan) argument of not being financially stable is not an excuse to not pay the claimant (Martha) her dues,’ ruled the tribunal on April 30.
‘As much as we sympathise with the respondent on financial inability to repay, the claimant is entitled to their dues. They cannot be held captive to a society, yet they joined voluntarily.’
Metropolitan is among five saccos which the Sacco Societies Regulatory Authority barred from receiving deposits early this year, allowing them to operate under restricted credit-only permits. This came on the back of suspected multi-billion shillings fraud that spooked savers, leading to disrupted operations.
Fraud charges
On Tuesday, 19 former officials of the sacco were charged with nine counts, including suspected conspiracy to defraud the sacco of Sh14.49 billion on diverse dates between 2012 and 2021.
Ms Gachoya’s favourable ruling was one of at least four rulings that were made against Metropolitan on the same day, April 30. Others were in favour of Clare Akasa Juma who was seeking Sh445,527, Ernest Kiplangat Koech (Sh99,069), and Edward Macharia (Sh287,091).
Seven days earlier, Metropolitan had, on April 23, been hit with nine rulings in favour of savers in a single day. The awards included Sh261,189 in favour of Josephat Atsunga, Agnes Nyaruri Isaaka (Sh450,513), Mary Wangari Kiarie (Sh539,235) and Lucy Nyambura Mani (Sh379,490).
‘The claimant cannot be forced to be part of a society which she joined voluntarily and has expressed interest in withdrawing,’ ruled the tribunal in the matter involving Ms Kiarie.
Cash crunch
Metropolitan has revealed pressure in servicing the refunds, as was captured in the case involving Ms Mani. In the case, the tribunal says the defence by Metropolitan was that there is a need for a structured payment ‘due to numerous cases’ of withdrawal that ‘have overwhelmed the society.’
Other awards made on April 23 against the sacco were in favour of Stanley Mbogo Mukiri (Sh255,091), Cecilia Njoki Ndiritu (Sh367,928), Anthony Irari Ngugi (Sh657,191), Sarah Karuana Nyaga (Sh648,039) and Zakaria Benjamin Walumbe (Sh464,516).
In the case of Mr Walumbe, Metropolitan told the tribunal that the sacco has been going through ‘turmoil’ and it is ‘overwhelmed’ by various applicants seeking to exit as a result of mismanagement. The sacco said it was necessary to have a more structured approach to handle the outstanding cases.
Some members are going as far as seeking to attach the sacco’s bank accounts, as was the case with Ms Nyaga’s Sh648,039 claim. She sought the tribunal’s order to attach Metropolitan’s account at Co-operative Bank of Kenya.
The tribunal ordered Co-op Bank to freeze the sacco’s account and use the Sh1.01 million in the account to settle the member within five days.
Co-op Bank’s argument that it could not garnish the sacco’s account on ground that it owed it Sh5.8 million loan was struck out on grounds that Sh1.01 million was not held as security for the loan.
In 2023, the commissioner for cooperatives David Obonyo issued notices of surcharging the senior executives of the sacco in court over the misappropriation of Sh7.2 billion through fictitious dividend payments.