The Chairman of Ushirika Council Mr. Japheth Magomere, OGW

The Chairman of the Co-operative Alliance of Kenya Mr. Stanley Muchiri, EBS

Co-operative Leaders

Distinguished Guests

Ladies and Gentlemen

Today is an important day when we Kenyans join the rest of the world in marking the international co-operative day, better known in Kenya as ushirika day, which is marked on the first Saturday of July every year.

It is the day when cooperators look back and take stock of the achievements they have made and re-energize themselves to grow the movement to even higher levels.

It is very encouraging to note that Kenya’s cooperative sector has grown in leaps and bounds, recording remarkable achievements in economic growth and improving people’s standards of living.

At independence in 1963, Kenya had a mere 1,030 registered co-operative societies with a total share capital of Ksh.100,000. Todate, the number has grown to over 16,000 registered cooperative societies with a membership of over 13 million and a turn-over of over Ksh.100 Billion.

Distinguished Guests,

The movement is a key source of employment. Currently, cooperatives employ over 500,000 people directly. 63 per cent of the Kenyan population derives their livelihood directly from cooperative-based economic activities.

According to the International Co-operative Alliance (ICA), Kenya’s cooperative movement is the fastest growing in the world and is ranked the best in Africa and the 7th best in the World.

The savings and credit cooperative societies (sacco) movement in Kenya was admitted to the league of the ten (10) most developed globally.  The members of the group of 10 are Kenya, Ireland, United States of America, Brazil, Mexico, Poland, Australia, Caribbean, Canada and Costa Rica.  Kenya is represented in the group of 10 by Kenya Union of Savings and Credit co-operatives Ltd (Kuscco).

It should further be noted that Kenya offers consultancy services on co-operatives to various countries in Africa including Rwanda, South Sudan and South Africa, among others.

This is not an achievement of mean repute. It has taken Kenyan co-operators effort and hard work to grow the movement. I take this opportunity to thank them for the achievement and challenge them to sustain this growth.

The government recognizes cooperatives as suitable vehicles for development and a key and integral part of the government’s economic strategy in poverty alleviation, employment creation, food security and equitable distribution of natural resources.

Due to its very nature of mobilizing communities into economic activities both in the urban and rural areas, the government has fully devolved supervision of the sector. My Ministry will continue to support the sector by providing conducive policy and legal framework.  Specifically, I would like to invite collaboration and partnership with the County Governments on the areas of value addition in all products and services which is the engine to drive Kenya into achieving Vision 2030.

Fellow Cooperators,

Activity profiles of co-operatives cut across all sectors of our economy, notably in agriculture, finance, housing, transport, building and construction, manufacturing and distributive trade.  The highest concentration of co-operative activities though, is within the financial services sector with a proportion of 49% while agriculture takes 38% and other industries constitute 13%.

In the agricultural sector, co-operatives are largely involved in the marketing of agricultural produce, while in manufacturing co-operatives involvement is confined to primary and secondary processing of agricultural produce.  In the financial sector co-operatives are mainly involved in the mobilization of funds and disbursement of credit to the members.

The sacco subsector is the most stable with over 5000 savings and credit co-operative societies (saccos) which have been successful in mobilizing over Ksh.420 billion as members’ savings for disbursement as loans and Ksh.500 billion asset base.

The cooperative movement has championed marketing of Kenya’s arabica coffee which is renowned worldwide for its high quality and due to this it is used for blending other coffee varieties from other parts of the world.

Coffee marketing is mainly done through the Kenya Co-operative Coffee Exporters (KCCE) Limited, a farmers’ organization registered to handle coffee from the co-operatives sector by minimizing the intermediaries along the coffee value chain.

Its entry into coffee marketing in 2009 triggered a price increase from Ksh.20 per kilo of cherry to Ksh.140 per kilogram of cherry in 2010. This was the highest price ever paid to coffee farmers.  I urge respective County Governments to build capacity in this subsector in order to ensure steady growth in price and quality of coffee.

The government has further set up the coffee development fund for financing the coffee sector and has instituted reforms to further streamline coffee marketing with a view to reducing costs thereby increasing the returns to coffee farmers.

Now turning to the youth, it is encouraging to note that Kenya has so far registered  over 200 registered youth co-operative societies which include Bunge Youth Saccos in the counties, Matatu Saccos and Youth Saccos in the informal sector.  The youth co-operative activities have been most pronounced in the transport sector where they operate matatus and boda bodas.

The recent establishment of the Uwezo Fund will indeed provide the much needed funds to finance various youth co-operative programmes in areas such as sports, cultural activities, trade, information and communication technology (ICT), matatus and film industry.  This will engage our young population in productive economic activities hence reducing incidences of insecurity in the country.

Ladies and Gentlemen

The government has been steadfast in encouraging the youth as well as women to start income generating activities. To this end, the Ministry will facilitate the promotion and development of youth and women cooperatives countrywide.

The government has also directed that at least 30 per cent of contracts be reserved for youth and women. I urge all the Kenyan youth to form or join existing co-operatives in order to access this facility.

Lastly Mr. Chairman, I wish now to take this opportunity to thank everyone for having found time to attend this occasion.  In particular I want to thank the National Council for Ushirika Day Celebrations for their tireless efforts towards perfecting the preparations to make this year’s Ushirika Day a truly memorable occasion.

Long live the co-operative movement.  Long live Kenya.

Message of the International Co-operative Alliance

92nd Alliance International Co-operative Day
20th UN International Day of Co-operatives
5th July 2014
“Co-operative enterprises achieve sustainable development for all.”
This year, International Co-operative Day, to be celebrated on 5 July, will have the
theme of “Co-operative enterprises achieve sustainable development for all.” Concern
for the community is one of the co-operative movement’s founding values and, as
such, the need to sustainably safeguard favourable living conditions for communities
underpins all co-operatives’ operations and vision.
In a general sense, sustainability is the capacity to support, maintain or endure. Since
the 1980s, the concept of sustainability has evolved to mean the integration of
environmental, economic and social dimensions. Co-operatives here again are the
forerunners of modern sustainability. By placing human need at their centre, they
respond to today’s crises of sustainability and deliver a distinctive form of “shared
One of the goals of the Blueprint for a Co-operative Decade is to “position cooperatives
as builders of sustainability.”1 The co-operative sector needs to explain and
show to the world that sustainability is part of its intrinsic nature, and that cooperative
enterprises make a positive contribution to sustainability.
As part of this, the Alliance commissioned a scan of co-operatives from different
sectors and regions around the world to see how closely linked they are to
sustainability. Launched at our global conference in Cape Town in November 2013, the
report concluded that co-operatives embed sustainability into their operating model
and values, and that the United Nations can and should recognise this. Indeed, in a
resolution adopted in December 2001, the UN urged governments to encourage and
facilitate “the establishment and development of co-operatives, including taking
measures aimed at enabling people living in poverty or belonging to vulnerable groups
to engage on a voluntary basis in the creation and development of co-operatives”.2
The United Nations is currently setting ambitious new targets for the period after 2015
and these will be called the Sustainable Development Goals. The co-operative
movement touches one billion people worldwide and through our vision of sustainable
development for all, we can be key partners in this.
We would like to urge co-operatives around the world to use 5 July to showcase how
co-operatives are the best-placed enterprise model to develop and build sustainability
in the 21st century.

Enabling Environment for effective financial management

Key areas that provide an enabling environment for effective financial management and therefore analysis include; good governance, good leadership, proper integration of staff with in the financial management
function and appropriate financial policies and procedures.
 The governance structure should be appropriate and the governing body active.
 The vision and mission should be clear and consistently stated, known and shared.
 The organisational core values should be clearly stated, known and shared.
 Clearly defined strategy that helps planning and implementing activities. Minutes of board and management meetings should be kept including action points which are followed up.
 Board and management exercise effective leadership.
 The leadership should set priorities and provide a clear direction for the SACCO
 The leadership directs, motivates and manages staff well
 The organisational structure is clear and appropriate for effective leadership
 The SACCO should have adequate infrastructure, facilities and technology to carry out its activities
Financial policies and procedures
 The SACCO should have an appropriate and documented financial policy and procedures
 Staff should be aware of and comply with the stated policies and procedures

Objectives and Users of Financial Statements

The primary objective of Financial Statements is to communicate in general terms the financial performance and position of the institution and how well the institution is achieving its stated objectives. The following are the typical SACCOs‟ stakeholders and the broad areas of analysis that interests them:
 Board members: The board members would like to interpret /analyse financial statements and operational statistics to better
perform their key duty of monitoring management performance and steering the SACCO towards attaining its institutional objectives, which usually includes financial sustainability.
 Management: They measure their performance with a view to improving it. They would also like to study, identify and address areas of good, average and poor performance.
 Membership: These assess the prospects of receiving dividends and capital growth and the overall safety of their investment and savings in the SACCO.
 Regulatory bodies: These would like to be convinced that the SACCO is run professionally. They would also like to know whether
the institution is financially and operationally sound and that it is run in such away as to maintain the soundness and safety of assets, for continuity.
 Creditors: The creditors would like to be assured that the SACCO will be able to pay both interest and principal. They are concerned with short term liquidity (ability to meet current financial obligations as they become due) long term solvency (ability to generate enough cash to repay long term debts as they mature) as well as the levels of debt in relation to equity.
 Donors: The donors would like to know whether the SACCO will be able to provide the service on a sustainable basis and create impact while meeting grant or loan requirements and conditions.
Various SACCO stakeholders require information to assess the extent to which the institution objectives have been attained. Accounting through financial statements provides most of this information. Best practice in microfinance stipulates that good financial management and financial analysis is the basis for successful and sustainable microfinance operations.
The quality of financial analysis depends on the quality of the information that has been recorded for analysis and this information is derived largely from the accounting system.

If you find an excuse, don’t pick it up

When it comes to excuses, the world is full of amazing inventors. Don’t spend half your life telling what you are going to do and the other half explaining why you didn’t do it. An alibi is the supposed proof that you did what you didn’t do, so that others will think you didn’t do what you did.

Mistakes have hidden powers to help us, but they fail in their mission of helping us when we blame them on other people. When you use excuses, you give up your power to change and improve. You can fall down many times, but you won’t be a failure until you say that someone else pushed you. Edmund Gosse said, “Never mind whom you praise, but be very careful whom you blame.”

If you find an excuse, don’t pick it up. Failures are experts at making excuses. There are always enough excuses available if you are weak enough to use them. The world simply does not have enough crutches for all the lame excuses. It’s always easier to find excuses than time for the things that we don’t want to do.

From: John Mason Book “Imitation is Limitation.”

When God gives you a word, don’t make a paragraph out of it

There is a famous old story about a man who was sleeping at night in his cabin when suddenly his room was filled with light, and God appeared. The Lord told the man He had work for him to do, and showed him a large rock in front of the cabin. The Lord explained that the man was to push against the rock with all his might. So the man did, day after day.
For many years he toiled from sunup to sundown, his shoulders set squarely against the cold, massive surface of the unmoving rock, pushing with all of his might. Each night the man returned to his cabin sore and worn-out, feeling that his whole day had been spent in vain.
Since the man was showing discouragement, the adversary (Satan) decided to enter the picture by placing thoughts into his weary mind: “You’ve been pushing against the rock for a long time, and it hasn’t moved.” Thus, he gave the man the impression that the task was impossible and that he was a failure. These thoughts discouraged and disheartened the man. Satan said, “Why kill yourself over this? Just put in your time, giving just the minimum effort; that will be good enough.”
That’s what the fatigued man planned to do, but he still decided to make it a matter of prayer and take his trouble thoughts to God. “Lord,” he said, “I’ve labored long and hard in your services, putting all my strength to do what you have asked. Yet after all this time, I have not even budged that the rock by half a millimeter. What’s wrong? Why am I failing?”
The Lord responded compassionately, “My friend, when I asked you to serve Me you accepted, I told you that your task was to push against the rock with all of your strength, which you have done. Never once did I mention to you that I expected you to move it. Your task was to push.
“And now you come to Me with your strength spent, thinking that you have failed. But is that really so? Look at yourself. Your arms are strong and muscled, your back sinewy and brown; your hands are callused from constant pressure, your legs have become massive and hard. Through opposition you have grown much, and your abilities now surpass that which you used to have. True, you haven’t moved the rock. But your calling was to be obedient and to push and to exercise your faith and trust in My wisdom. That you have done. Now I, my friend, will move the rock.”

Lesson: When God gives you a word, don’t make a paragraph out of it. Usually our additions to what He says get us in trouble or cause delays. Yes, use the faith that moves mountains, but remember, it’s He who will actually do it.
From the Book “Imitation is Limitation” by John Mason.

Financial Management

Financial management for the SACCOs involves decisions on how the SACCOs‟ operations will be financed (sources of funds), how the funds are utilised (investment decisions) with the overall objective of achieving the SACCO mission and goals. Financial management thus focuses on the development of strategies to prudently manage the financial assets of the SACCOs as well as using tools and techniques for financial planning to achieve its organisational objectives.
Like all other microfinance institutions, the managers and board of the SACCOs have a fiduciary duty to prudently manage the financial resources of the SACCO. As part of this responsibility, the directors are legally required to prepare and present financial statements that show the financial performance and position of the SACCO over a specified period.
The information extracted from the financial statements is then used in assessing the stewardship of the board and management and to what extent the financial objectives have been achieved. The SACCO‟s financial objectives may include amongst others;
 Maximizing of capital growth
 Attaining financial Sustainability
 Prudently managing the assets and liabilities of the SACCO
The SACCOs‟ financial statements by themselves tell only a flat story. From a cursory look at the figures in the financial statements presented by the directors, and managers, one may not be able to decide whether the SACCO is doing well or badly, whether it is financially strong or vulnerable. To extract from them a meaningful story that relates to the SACCO‟s vision, mission, objectives and plans, and the extent to which these have been achieved, finance professionals have developed several tools and methods collectively referred to as Financial Analysis which collectively aid Financial Management.
The discipline of financial analysis, therefore, is one of extracting meaningful interpretation out of general financial statements. Financial analysis involves comparing one figure against another to produce ratios, and assessing whether the ratio indicates a weakness or strength. The comparison can be with other Institutions, or for the same institution but over different periods. Financial ratio analysis can be broadly grouped into the following categories;
 Profitability ratios
 Liquidity ratios
 Solvency ratios
 Portfolio quality ratios
 Efficiency ratios


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