Structure of the Co-operative Movement in Kenya

The co-operative movement in Kenya is organized into four-tier system consisting of; Apex, Tertiary (NACOs), Secondary (County/District Unions) and Primary;
Apex Co-operative Organization
The apex co-operative organization today in Kenya is the Co- operative Alliance of Kenya (CAK).
 The Co-operative Alliance of Kenya Limited (CAK) was registered on the 22nd December, 2009 as the National Apex Organization for the Co-operative Movement of Kenya under the Co-operative Societies Act, CAP 490 Laws of Kenya.The newly registered Co-operative Alliance of Kenya Limited is to be the driving force of the Co-operative Movement in Kenya.
 CAK is a successor to Kenya National Federation of Cooperatives (KNFC). KNFC was formed in 1964 by co- operative societies unions and NACOs to be the spokesman of the co-operative movement and to promote co-operative interest. However, KNFC faced some challenges in late 90’s and early 2000 which led to its liquidation.
 CAK endeavors to promote co-operative development, to unite the Co-operative Movement and to represent the Co- operative interests on all matters of policy and legal framework and to be the spokesperson of the Co-operative Movement in Kenya.
Tertiary National-Co-operative Organizations (NACOs)
These are countrywide co-operative organizations whose membership is drawn from secondary and primary co-operatives.
NACOs offer specialized services to their affiliates, which include insurance, banking, housing, commodity marketing and promotion of active relationship with social and economic partners in order to create favorable climate for co-operative development.
They provide commercial and financial services, human resource development, advocacy and representation of co-operative unions and societies at the international level. Currently there are ten
NACOs which are:Co-operative Bank of Kenya Ltd, Kenya Co- operative Coffee Exporters (KCCE) Ltd, Co-operative Development and Information Centre (CODIC) Ltd, Co-operative Insurance Company of Kenya (CIC) Ltd, New Kenya Co-operative Creameries (KCC) Ltd, Kenya Planters Co-operative Union (KPCU),
Kenya Union of Savings and Credit Co-operative (KUSCCO) Ltd, Kenya Rural SACCO Societies Union (KERUSSU) Ltd, National Co- operative Housing Union (NACHU) Ltd and Cooperative Communication Holdings Ltd (CCHL)
Co-operative Bank of Kenya Ltd
The Co-operative Bank of Kenya Limited was registered as a co- operative society on the 19th June 1965.
 The Bank applied for a banking licence to operate under the Banking Act, which was granted later on and it opened for business on 10th January 1968.
 The Bank is now incorporated in Kenya under the Company’s Act and is also licensed to do the business of banking under the Banking Act. It was initially registered under the Co-operative Societies Act at the point of founding in 1965.
 This status was retained up to and until June 27th 2008 when the Bank’s Special General Meeting resolved to incorporate under the Companies Act with a view to complying with the requirements for listing on the Nairobi Stock Exchange (NSE).
 The Bank went public and was listed on December 22 2008. Shares previously held by the 3,805 co-operatives societies and unions were ring-fenced under CoopHoldings Co- operative Society Limited which became the strategic investor in the Bank with a 64.56% stake.
 Co-operative bank has a distinct advantage in co-operative societies spread across all the 47 counties and can therefore provide a reliable alternative for establishing branches countrywide.
 The Bank is already in a franchising partnership through Sacco Link which provides wholesale banking services to individual SACCO’s which then provide retail banking services to members through FOSAs.
Kenya Co-operative Coffee Exporters (KCCE) Ltd
This was formed in 2008 by small scale coffee farmers to enable them access export markets through enhanced economies of scale and professional expertise in coffee marketing. KCCE is licensed as a commercial coffee marketing agent that provides small holder coffee farmers with an opportunity to directly sell their produce to the international market. Since its registration producer prices have improved significantly.
Co-operative Development and Information Centre (CODIC) Ltd
This was developed as a one stop shop for co-operative societies on issues of information technology and co-operative development.
 The primary function is computerization of cooperative society operations in order to improve efficiency.

 Among its major achievements is development of software which is used to install ATMs in a number of societies.
Co-operative Insurance Company of Kenya (CIC) Ltd
The Co-operative Insurance Company of Kenya Limited (CIC) was established in 1978 and was formerly known as Co-operative Insurance Services Limited (CIS).
 In 1999, the company name was changed to the Co- operative Insurance Company of Kenya Limited (CIC)
 The name change was part of the company’s market repositioning strategy of completely changing the then small company to a respected insurer in the country.
 It is currently among the largest insurance companies in terms of capitalization and insurance premium
Kenya Planters Co-operative Union (KPCU)
Kenya Planters Co-operative Union (KPCU) was registered 1937 as a national co-operative union for primary coffee co-operatives societies.
 The union, however, currently faces some serious challenges necessitated by poor governance structure and dual certificate of registration.
 KCB had placed the organization under a statutory manager/receiver but has since been lifted pending clearance of the outstanding loan
 A new board of directors has already taken over from the receiver manager and are in the process of paying the loans
Kenya Union of Savings and Credit Co-operative (KUSCCO) Ltd
KUSCCO is the union for SACCOs in Kenya. It is charged with responsibility of championing issues affecting SACCOs in Kenya through advocacy and representation. The main objectives of
KUSCCO are to:
 Promote the organisation and development of viable co- operative savings and credit societies
 Disseminate information concerning savings and credit societies and co-ordinate their operating methods and practice to maintain basic uniformity
 Foster education, training of members, officials and employees of savings and credit societies
 Act as the sole local and international representative and mouthpiece of savings and credit societies
 Help improve the internal management of savings and credit societies by providing a standardized management system.
KUSCCO operations are managed by a board of 15 directors selected by member SACCOs on regional basis.
The organisation has its Headquarters in Nairobi and five branch offices in Kisumu, Nakuru, Nairobi, Embu and Mombasa. Each upcountry office serves KUSCCO members within its region.There are sub branches in wider regions to cover all the 47 counties
Kenya Rural SACCO Societies Union (KERUSSU) Ltd
The Kenya Rural Savings & Credit Cooperatives Societies Union (KERUSSU) was registered in 1998 and is the umbrella national cooperative organization for rural SACCOs. KERUSSU brings together rural SACCO societies and other forms of savings & credit associations in Kenya.
The membership of KERUSSU is made up of cooperative societies whose operations are largely based in rural areas of Kenya where:
 The members’ major source of income is from rural based activities such as farming
 The greater percentage of the members live in rural areas
 And where members are largely derived from institutions and establishments such as factories based in rural areas and/or process inputs that are mostly from the rural areas.
The overall goal of KERUSSU is to contribute to improved standard of living in the rural areas of Kenya through appropriate, efficient and effective rural cooperative movement with the capacity to offer accessible and affordable financial services.
The aim of KERUSSU is to work towards empowered and dynamic rural SACCOs offering effective and efficient services to their members.
National Co-operative Housing Union (NACHU) Ltd
NACHU was established in 1979 under the Co-operative Societies Act (Cap 490)to coordinate shelter issues through the co- operative model by providing financial and technical service.
 Its formation was in response to the great demand for decent and affordable housing among the low income group.
NACHU therefore is an organization whose membership is made of registered primary housing cooperatives.
 The co-operative movement has an obligation under Kenya Vision 2030 to provide 25% of annual housing demand in Kenya.
 NACHU’s strength is its holistic approach to shelter development: housing microfinance combined with advocacy and technical services that allow cooperatives to gain access to land and infrastructure, and ensure quality construction.
 NACHU also supports member cooperatives with training in financial management, governance, and other important topics including HIV/AIDS prevention.
Cooperative Communication Holdings Ltd (CCHL)
Co-operative Communication Holdings Limited (CCHL) is a National Co-operative Organization (NACO) which was registered on 8th March 2010 to enter into partnership with the private sector in the provision of Information Communication Technology (ICT) services to the co-operative movement as a vehicle for
investment in this fast growing sector.
The core activity of the CCHL is to partner with the private sector on areas of ICT in order to maximize returns to the members and ensure access to information through the provision of affordable products and services thereby promoting their social economic welfare. ICT is critical to the country’s development and CCHL is strategically placed to provide the best ICT products.
Secondary Co-operatives (County/District Cooperative Unions)
These co-operatives restrict their membership to primary co- operative societies. They include the County/District Co-operative Unions which serve the primary co-operatives as service agencies.
They are managed by an executive committee whose members are elected from the primary co-operatives. They are formed with the aim of enhancing economies of scale through shared goods
and services such as bulk procurement of farm inputs and education and training of its afflicts.
Primary Co-operatives
These co-operatives restrict their membership to individual persons and are mainly formed by individuals within a given locality or common bond. Most of them are single-purpose or single product enterprises.They group individual members for their economic thrift and cut across all sectors of the Kenyan economy such as; Marketing Co-ops, Savings and Credit, Housing, Horticulture, Livestock, coffee, pyrethrum, sugar cane, cotton, Fisheries and Dairy. They include; Manufacturing/processing, Construction, Transport, Irrigation, Farm purchase e.g Konza, Mining [Turkana] alluvial gold and Investment Co- operatives. Notable achievements include;
 Most Kenyans have benefited in one way or the other from the Co-operative movement, through educations and acquisition of land from the white settlers.
 Modern day Kenyans in very many spheres of the economy have benefited from societies through borrowing and establishing businesses
 Employees have joined SACCOs, obtained loans for purchase of plots, cars, construction of houses and payment of school fees.
 Notable cooperators are Members of Parliament who are either members of Bunge Sacco or Parliamentarian Sacco.
 The SACCO sector has grown to a point where some SACCOS are bigger than commercial banks e.g Mwalimu SACCO with a membership of 47,179, has assets totaling Kshs. 22 billion with a monthly cheque of Ksh.600 million from employers and Harambee SACCO with a membership of 98,640, has assets totaling 13 billion with a monthly cheque of Ksh.454 million as at November 2010.
 Individual contribution has grown and there is case where one employee has saved fifty million shillings with a SACCO which shows the confidence members have in cooperatives.
 SACCOS have mobilized huge amounts of money, thereby support the economy. So far SACCOS have raised approximately Kshs. 380 billion as at 31st December, 2012.
 Co-ops bring about security, stability, prosperity and equity
 Co-operatives are not well understood and therefore their potential to reduce poverty and the inequality gap is not appreciated.

Compiled By:

Emily M. Gatuguta, OGW
Peter Kimotho
Samwel Kiptoo
Date: Tuesday, January 14, 2014


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