Kenyan Woman Wins KSh 500k Savings Refund Case Against SACCO She Left in 2022

• Ruth Njuguna successfully sued Metropolitan SACCO for failing to refund her KSh 503,000 savings after she officially exited the SACCO in July 2022
• The Cooperatives Tribunal ruled that Njuguna had lawfully exited the SACCO and found no evidence that she failed to meet any procedural or financial obligations
• Metropolitan SACCO had been marred by a scandal, with members reportedly losing savings between 2021 and 2023 due to widespread embezzlement and fake loans

Elijah Ntongai, a journalist at TUKO.co.ke, has over four years of financial, business, and technology research and reporting experience, providing insights into Kenyan and global trends.

A Kenyan woman successfully sued her former Savings and Credit Cooperative Society (SACCO) for withholding her KSh 503,000 savings after she exited in 2022.

In 2022, Ruth Njuguna filed a suit at the Cooperatives Tribunal in Nairobi after the Metropolitan SACCO failed to refund her savings after her exit.

Njuguna told the tribunal that she submitted an exit letter to the SACCO on July 29, 2022, seeking a refund of her deposits and cumulative shares that were worth KSh 503,000.

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The tribunal further heard that the SACCO failed, neglected and/or refused to refund the Njuguna's share contribution in breach of the SACCO's by-laws.

What did Metropolitan SACCO say?

In its statement of defence dated February 17, 2023, the SACCO argued that Njuguna failed to prove the existence of her shares and did not meet the conditions for a refund.

The SACCO claimed the statement of claim was filled with misrepresentations and omitted key facts. The respondent also noted that during their Annual General Meeting, members agreed to suspend refunds due to ongoing liquidity issues, which were known to the claimant.

The SACCO further cited financial turmoil and liquidity challenges, mismanagement by the previous committee, and an influx of withdrawal requests, stressing the need for a structured approach to safeguard the SACCO's future.

What did the Cooperatives Tribunal decide?

The Tribunal found that the claimant had properly withdrawn from the SACCO through written notice and a demand for a refund.

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The tribunal also found no evidence from the respondent disputing the procedure or indicating outstanding liabilities on the claimant's part.

Despite the SACCO's financial difficulties, the law, specifically Section 21(6) of the Sacco Societies Act, mandates that a member's non-withdrawable deposits be refunded within 60 days of a written withdrawal notice.

"The Legal Notice No. 82 (The Sacco Societies Act) at Section 21 (6) is also clear to the effect that: A non-deposit-taking Sacco society shall refund to a member the amount accumulated in the member’s non-withdrawable account within sixty days of receiving the written notification of the member to withdraw from membership of the Sacco society,” read the tribunals ruling.

Njuguna provided a statement of account dated September 9, 2022, confirming the owed amount, and since the respondent did not dispute it, the tribunal concluded that the SACCO owes the claimant KSh 503,000 in refunds.

Consequently, a judgment was entered in favour of the claimant for the sum of KSh 503,000 with costs and interest at tribunal rates from the date she filed the claim in a ruling that was signed and delivered virtually on April 29, 2025.

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Metropolitan SACCO scandal

Earlier, TUKO.co.ke reported that between 2021 and 2023, over 100,000 members of Metropolitan National Sacco lost KSh 15 billion due to rampant embezzlement and financial mismanagement, according to an audit and disclosures by the interim chairperson.

An audit revealed that KSh 12 billion was siphoned off through a well-organised syndicate involving both past and current staff, with glaring cases such as a teller illegally withdrawing KSh 49 million at the Nakuru branch.

An additional KSh 7 billion was issued as loans to fake members, pointing to serious lapses in the Sacco’s loan approval processes.

To cover up the fraud, the former leadership allegedly paid out dividends and rebates using members’ deposits instead of profits, inflating the financial position.

Proofreading by Mercy Nyambura, copy editor at TUKO.co.ke.

Source: TUKO.co.ke