a) Savings and Credit Co-operative Societies
These are formed to provide financial support to members. They accept deposits to members and grant them loans at reasonable interest rates in times of need.
The objects of a Sacco are:
- To promote thrift among its members by affording them an opportunity for accumulating their savings and deposits and create thereby a source of funds from which loans can be given to them exclusively for provident and productive purposes, at fair and reasonable rates of interest; thereby enabling them to use and control their money for their mutual benefit.
- To ensure personal growth through the introduction of new products and services that will promote the economic base of the members.
- To ensure progress of members and society through continuous education programs on proper use of credit, reduction of poverty, human dignity and co-operation.
- To apply the co-operative principle of co-operation among co-operatives in order to promote members’ interests. In furtherance to the objects the society shall affiliate to the relevant National Co-operative Union and the Apex society.
b) Housing co-operatives Societies
These are co-operative societies formed to provide residential houses to members. They purchase land, develop it and construct houses or flats and allot the same to members. Some societies also provide loans at low rates of interest to members to construct their own houses.
The objects of housing co-operatives are:
- contracting for loans from non–members by issuing debentures or mortgaging its property or by any other means up to a maximum amount to be decided by the General Meeting.
- Lend money to members for the purpose of;
(a) Acquisition of living accommodation for themselves,
(b) For income generating purposes on such terms and with such security as the Management Committee may from time to time determine or guarantee loans and advances to members for similar purpose.
(iii)Undertake building operations by such means either directly or indirectly as the committee may decide.
(iv) Acquire supplies of building and similar materials and machinery of all kinds including household furniture and equipment for use in building or for sale or hire to members.
- Acquire and relinquish lands, buildings and rights over land and buildings by purchase, lease or any other means as may be necessary for the attainment of these objects.
- Employ architect, builders, contractors, issue plans negotiate and contract for services for light and power, water drainage, roads, and generally do all such things as are necessary and customary for the acquisition of land and its development for housing purposes.
- Enter into contracts with members for the sale or lease of land and building acquired by the society in pursuance of its objects on such terms and conditions as may from time to time be determined.
- Ensure progress of members and society through continuous education programmes on proper use of credit, reduction of poverty, human dignity and co-operation.
- To apply the co-operative principle of cooperation among cooperatives in order to promote members’ interests and in furtherance to the objects of the society affiliate to the relevant National Co-operative union and the Apex society.
c) Consumer Co-operatives Societies
These societies are formed to protect the interest of general consumers by making consumer goods available at reasonable price. They buy goods directly from the producers or manufactures and thereby eliminate the middlemen in the process of distribution.
d) Agriculture/Farmers Co-operative Societies
These are formed by small farmers to work jointly and thereby enjoy the benefits of large-scale farming.
e) Producer Co-operative Societies
These societies are formed to protect the interest of small producer by making available items of their need for production like raw materials, tools and equipment, machinery etc.
f) Marketing Co-operative Societies
These are formed by several producer and manufacturers who find it difficult to sell their products in their market. A good example is the Kenya Co-operative Creameries that deals with milk.
The objects of a marketing co-operative are:
- To arrange for co-operative marketing, processing, grading, packaging and transporting the members produce and such other operations as may be necessary for the most profitable disposal of the produce.
- To arrange for the purchase and resale of farm inputs and chemicals and other similar requirements of the members.
- To take measures to control pests and diseases.
- To foster education and training of members, committee members and employees.
- To provide co-operation and good will between members and the society
- To Co-operate with other co-operatives in order to promote members interests and in furtherance of the society’s objectives.
- To apply the co-operative principle of co-operation among co-operatives in order to promote members’ interests. And in furtherance to the objects of the society affiliate to the relevant National Co-operative Union and the Apex society.
g) Investment Co-operative Societies
The objects of an investment co-operative are:
- To invest members’ contributions in prudently identified ventures in order to maximize the return on their investment.
- To acquire, lease, or otherwise dispose of the society’s building(s) and other fixed properties as necessary.
- To purchase, take on lease or exchange, hire or otherwise acquire any movable or immovable property of any kind of any interest therein any right or privileges which the management committee of the society may think necessary or convenient for the purpose of or in connection with Society’s business or which may enhance the value of any other property of the society.
- To improve, manage, develop, and turn to account, grant rights or privileges in respect of or otherwise deal with any of the property, rights and privileges of the society.
- To acquire and undertake the whole of any part of the business, assets and liabilities of any person or Society carrying on or proposing to carry on any business which the society is authorized to carry on or which can be carried on in conjunction with any business of the Society or which is possessed of property suitable for the purpose of the Society.
- To pay out the funds of the society, all expenses which the society may lawfully pay for or in connection with the formation and registration of the society.
- To amalgamate, enter into partnership or into any arrangement for sharing profits, union of interests, co-operation, joint ventures, reciprocal concession, limiting competition or otherwise, with any person of society carrying on or engage in or can be carried on in conjunction with any business of the society or which is capable of being conducted so as to benefit the society, directly or indirectly.
- To borrow money or receive money or deposit either with or without security or secured by debentures, mortgages or other security charged on the undertaking or on all or any of the assets of the society.
- To subscribe for, underwriter, buy, hold, sell and deal (either on or off a stock exchange, and either as principles, agents or trustees) in every description, to advice on investment of all kinds, to advice on, assist and deal with issues, offers for sale, and generally to carry on the business of stock and share brokers.
- To remunerate any person or company either in cash or by allotment of shares credited as fully or partly paid up, for services rendered or to be rendered in placing or assisting to place or guaranteeing the placing of any of the shares in the Society’s capital of any debentures, debentures stock or other securities of the society or in or about the formation or promotion of the society of the conduct or development of its business and to pay out of the funds of the society all expenses and incidentals to its formation and registration.
This article was written by James Wanzala August 6th 2014. I have edited it slightly to distinguish between investment co-operatives, housing co-operatives and a savings and credit co-operatives (Saccos). Many journalists confuse these types of co-operatives to them Saccos cover all types of co-operatives.
BY JAMES WANZALA Updated Wednesday, August 6th 2014 at 16:35 GMT +3
As industry players try to come up with various ways to address the high housing shortage in the country, Co-operatives are emerging as important stakeholders in housing provision. Currently, it is estimated that Kenya has an annual housing deficit of 200,000 units, with only 50,000 being constructed per year. Although still difficult to quantify, co-operatives are contributing significantly to the 50,000 units offloaded onto the market annually. While some of them are constructing houses for members at subsidised prices, a number of them are helping members to buy land to put up their own houses. Over the last few years, several co-operatives have come to be associated with the real estate sector in a big way. Below are some of the notable names shaking the sector:
Urithi Housing Co-operative
Urithi Housing Co-operative Society Ltd (UHCSL) is registered with the Ministry of Industrialisation and Enterprise Development “to address the housing challenges caused by the global recession that has constantly put a strain on majority to own assets like land and houses”. The co-operative acquires land at a low price and passes on the subsidised cost to the members. The profits realised from the sales to non-members is ploughed back to be earned by the members as dividends or/and value addition activities on the land. Urithi, Swahili word for inheritance, serves those who want to invest for the future, thereby giving inheritance to oneself as retirement package or to loved ones like spouses and children hence the slogan “Buy and Wait, Don’t Wait and Buy”. The objective of the co-operative is to help members get accommodation and live in a better environment where they also enjoy ancillary service such as roads, drainage, water and lighting at a reasonable price. Another objective is to provide facilities for physical and cultural recreation “and all such other matters as are usual, customary and desirous for building estates, blocks of flats or single dwellings”.
Some of its projects are Own-A-Room, Nakuru Olive Courts House and Kitengela Olive Ostrich. Own-A-Room is currently ongoing and will be completed by February 2015, with 308 investors benefiting from the studio houses being built.
Safaricom Investment Co-operative (SIC)
The co-operative was set up in February 2009, with less than 200 members, and a capital base of Sh 2 million. By last year, the co-operative was boasting of 1,400 members and a Sh308 million capital base. The co-operative was born out of the need by Safaricom staff to have a reliable channel through which they could pursue investments and acquire assets. In May last year, the co-operative launched the Blue Bells Garden Housing project in Mlolongo, its pioneer housing project. The Sh1 billion housing project is being put up on five hectares and will comprise 300 units – a mix of two- and three-bedroom units – to be built in two phases. The first phase will have 160 units while the second phase shall have 140 units. Enclosed within a gated community, the estate will provide spacious units with adequate spaces both within and outside, a recreational area where occupants will be able to relax, a playground for the children as well as a calm, conducive environment away from the city’s hustle and bustle. More than 50 per cent of the units have been sold off plan.
Airport Housing Co-operative Society
Airport Housing Co-operative Society was formed in 2007, with its registered offices being at the Jomo Kenyatta International Airport. The society has grown through the years and has over 500 active members and is still growing. Ninety nine per cent of its members are employees of the Kenya Airports Authority. Three hundred members of Airport Housing Co-operative Society Limited are set to build their own houses on 100-acre scheme in Kaputiei in Isinya, Kajiado County, and more schemes are on the way. Currently, its two projects are Malindi and Katani, which involve selling parcels of land to members. The society hasn’t started building houses yet, but it finances housing projects and is looking forward to start building houses and selling them at reasonable prices, according to vice-chairman Rodgers Manana. In this arrangement, members develop their own plots under controlled scheme. The society plans to have a presence in all the 47 counties.
Kamuthi Housing Co-operative
Kamuthi Housing has been buying large tracts of land in prime areas on the outskirts of Nairobi and selling to members who put up their own houses. This co-operative was originally called Kahawa Farmers Co-operative Society. It was registered in 1964 with the aim of purchasing land from a colonial settler. The land was located off Kamiti Road between Githurai 44 and present-day Kahawa West Estate.
One of its well-known housing projects is the Sh1.8 billion Buffalo Hills Leisure and Golf Village in Kilimambogo, Kiambu County. Co-operative members have bought land in the project with the aim of putting up their own houses.
Read more at: http://www.standardmedia.co.ke/business/article/2000130725/the-sacco-revolution?pageNo=4
Kiambu-based Urithi Housing Cooperative Society has launched a Sh1 billion residential project in Kilimambogo on the outskirts of Thika town, targeting its 6,000 members. The venture, which will comprise 600 housing units, is funded through the society’s cash reserves, including financing from local banks.
Under the scheme, members contributed Sh355,000 to acquire the land and the sacco will help them secure building loans from local lenders.
Sacco chairman Samuel Maina told the Business Daily on phone that the project seeks to equip members with decent and affordable housing.
“The project stands on 100-acre piece of land. We started the groundwork last month and we have given the project a timeframe of two years to be complete. It will be named City Edge Project,” said Mr Maina.
He added: “Urithi Housing Co-operative Society will act as collateral to our members who want to acquire loans from the banks to develop their plots. We are in talks with Unaitas, K-Rep Bank and Equity Bank for the members to access loans.”
He said the first phase of the scheme is expected to cost Sh300 million and would be completed early next year. “The idea is to acquire more land through our members and start income generating projects that can accelerate the growth of the society,” he said.
Read More Here http://www.nation.co.ke/business/Sacco-launches-Sh1bn-real-estate-scheme-in-Thika/-/996/2395626/-/o6o661z/-/index.html
The Kenya Planters’ Co-operative Union board wants Parliament to institute an inquiry into the manner in which the Commissioner of Co-operatives, Mr Patrick Musyimi, has handled revival of the union.
KPCU chairman William Gatei called for the investigation on Monday moments after the commercial court in Milimani, Nairobi, presided by Mr Justice Weldon Korir, restrained aparallel board elected under the directive of the commissioner from taking office until a case filed against them is determined.
Mr Gatei accused the commissioner of instigating chaos through holding illegal elections that have brought back directors who presided over the collapse of KPCU, with the objective of having it driven under again.
“The commissioner sits on the board of Kenya Coffee Co-operative Exporters, which is in competition with KPCU for business. We had leased some facilities to KCCE, but we have declined to renew the contract. The commissioner is an interested party and is instigating the chaos to benefit KCCE,” Mr Gatei said on Monday after resuming office.
Some of those elected were barred from contesting elections by a parliamentary committee on agriculture, led by Mr John Mututho, in July 2012 over mismanagement of the union, leading to its placement under receivership.
He said the conduct of Mr Musyimi was suspicious as he had not offered any assistance in lifting KPCU’s receivership but had developed sudden interest in its affairs, leading to the current confusion.
On Friday, the directors forced their way into the union’s offices at Wakulima House, under heavy police guard in defiance of court orders restraining them from convening meetings or interfering with operations of the union.
Safaricom Investment Co-operative has unveiled Sh1 billion housing project on a five acre parcel of land in Mlolongo. Â The 300 housing units dubbed, Blue Bells Garden will be constructed in two phases. They will be completed in 2015. The project will be financed through a partnership with Co-operative Bank Speaking during the ground breaking, Safaricom Chief Executive Officer Bob Collymore said the first phase will be ready in September 2014, while the second phase will be ready at the end of 2015. “SIC has planned to invest more than Sh1billion in the entire project with the first phase having 160 units and the second phase having 140 units,” said Collymore yesterday. “These houses will be a mix of two and three bedroom units and will contribute towards reducing the 150,000 housing deficit that the country experience annually.” The project will also accommodate a commercial centre to serve its residents.
Read more at: http://www.standardmedia.co.ke/business/article/2000083297/safaricom-sacco-unveils-sh1-billion-housing-project-in-mlolongo
Isiolo County has launched the first Shariah compliant savings and co-operative society (Sacco) for women and youth. The initiative by the County Woman Representative Tiyah Galgalo on Saturday evening raised an initial Sh8.5 million. Ms Galgalo intends to raise Sh20 million for the 10 Wards in the County by October to jump start women and youth enterprise development. Dubbed Vuna (harvest) Sacco, the legislator said, the initiative aims to help youth start small but serious enterprises that will help them and families. Ms Galgalo was accompanied by Women Enterprise Fund Chief Executive Wainaina Wanjeri and Chairlady Mumina Gollo. She called on women to take advantage of the Women Enterprise Fund and Uwezo Fund to start small businesses.
Read more at: http://www.standardmedia.co.ke/business/article/2000126444/isiolo-county-gets-first-shariah-compliant-sacco