INVESTMENT CO-OPERATIVES ARE NOT NEW BEINGS!!!

Murang’a adopts model to mobilise development funds from the locals

By JOSHUA MASINDE of Daily Nation (FRIDAY, FEBRUARY 28, 2014)

Murang’a County has adopted a report by the commission of inquiry on the area’s investment cooperative society popularly known as Shillingi kwa Shillingi (shilling by shilling).

The study calls on the county government to formally adopt the fund mobilisation model by forming a corporation to manage its deals.

The county corporation, as it will be called, is expected to provide a legal basis for managing Murang’a Investment Cooperative Society Limited (MIC) and other schemes that the devolved unit may develop.

“The commission appreciates the nobility of the idea and vision behind formation of the MIC, and its possible huge impact in the economic growth to Murang’a County. It therefore recommends that the county government considers forming a county corporation,” the 14-member tram said in its Report of the Commission of Inquiry into the Murang’a Investment Cooperative Society Limited dated February 8.

“Such a corporation will provide a legal and solid platform to accommodate entities such as MIC, and facilitate public-private-partnerships on various economic and development projects.”

MIC was registered on October 1, last year, as a co-operative society under the cooperatives Act. As of January 29, the initiative had recruited 3,000 members and raised Sh4.8 million.

“The commission recommends that the governor communicates and shares his vision both with his executive members and all other elected leaders in the county. This will elicit the support and goodwill of fellow leaders and the general public,” the team chaired by Mr David Ngugi noted.

The move to mobilise funds from the public had caused a stir with the Capital Market Authority (CMA) sending letter to Murang’a governor seeking details. In its letter, the regulator reminded the MIC officials of the various provisions of the law that the model needed to comply with.

The initiative was the brainchild of Murang’a County governor Mwangi wa Iria, who had asked area residents to use the society to save as little as Sh35 daily to fund projects in return for dividend. Audit firm Deloitte and Touché came in as the project managers.

The cooperative society had set a target of recruiting 100,000 people with annual member funds of up to Sh3 billion.

In light of the initiative and on realising a legal vacuum, the market regulator acting chief executive Paul Muthaura said CMA would work with the Sacco Societies and Regulatory Authority to develop a county financing collective investment tool that will provide a framework for capital-raising plans at the devolved government level.

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My thoughts:

INVESTMENT CO-OPERATIVEI am surprised by the CMA’s reaction. If they did not know, we have many types of co-operatives registered and are being registered here in Kenya. One of them is an investment co-operative which probably is not known as much as Saccos or marketing co-operatives but they have been in existence. And they are what their names suggest them to be. They raise funds from members and invest. Probably CMA has never heard of Safaricon Investment Co-operative or Stima Investment Co-operative!!

Mr. Paul Muthaura should also know that Sacco Societies Regulatory Authority cannot develop whatever they are seeking as the name rightly suggests it deals with Saccos only as provided for under Sacco Society Act 2008. If they are seeking to develop a county financing collective investment tool, then head to department of co-operatives right next to you in Nairobi!! CMA should get out more I guess and just smell the “investment scene” for a while :-).

I am still beat why they formed the commission though!!

However there will be challenges on management of these types of ventures that are promoted by politicians……they never last. They are spineless like political parties in Kenya!!

Back to Work

holidayHi, the blog has not been updated for awhile now, but I am back to business!!!!…keep the questions coming and anything you want to know about the co-operative movement in Kenya…i.e. general issues about the movement form registration to dissolution. Cheers.

MEDIA WHY REFER SACCOs ISSUES TO KUSCCO?

I find it absurd that everybody in the media, usually refer questions concerning co-operatives (Saccos especially) to KUSCCO (Kenya Union of Savings and Credit Co-operatives). Why would one go to KUSCCO seeking to register a co-operative or clarification on what a Sacco is? Or more confusing what Sacco to join?

WHY THE HELL DO THAT?

WHY THE HELL DO THAT?

Isn’t there a government department (used to be a fully fledged ministry) that has an extension department that:

  • Offers advisory services to the Co-operative Movement on development of accounting, entrepreneurship, ICT and Management?
  • Empowers members to understand and apply the Cooperative Societies Act and Co-operative Development Policies?
  • Identifies opportunities for co-operatives to participate in the industrialization process, acquisition of required capital and value addition?
  • Facilitates dialogue between stakeholders on how to create a sustainable co-operative structure?
  • Ascertains compliance with provisions of the co-operative societies Act?
  • Sensitize the public on the advantages of the co-operative system and?
  • Disseminates relevant information on the development of cooperatives?
  • Promotes groups to be registered as co-operatives?
  • Encourages value addition and co-operative marketing?

KUSCCO is a union. A union is formed by two or more primary co-operatives. KUSCCO is a union of co-operatives and rarely play the advocacy role they claim they do. They though offer financial services to Saccos i.e. loans and insurance services. Technical services like consultancy, by-laws drafting, etc offered by KUSCCO are just too expensive for many Saccos. Its is therefore prudent to consult extension services of the Ministry of Industrialization and Enterprise Development, Co-operatives Department who will assist you.

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