Member Participation

The AGM being the supreme organ of the Sacco members should be facilitated by the board to fully participate in the AGM and other meetings of the Sacco including timely receipt of notice and documentation of the meeting including annual financial statements, corporate governance reports and other matters of importance to the members.
Prior to the AGM members should be encouraged to enhance their contributions to deliberations at the AGM through vigorous engagement at Zonal or branch meetings as well as Delegates pre-AGM briefings and conferences to ensure alignment of views and positions.
At the AGM, members should be given ample opportunity to raise any concerns they may have regarding the performance of the Sacco, as well as its governance, and to receive satisfactory answers to their enquiries. Voting at the AGM should be conducted in accordance with by-laws and the minutes of the AGM should be circulated to members as soon thereafter as possible.
Members should also be facilitated by management with easy access to information relating to the Sacco including internal regulations, registers, minutes of the general meetings, supervisory committee meetings and all regulations in force.
Other rights of participation by members include:
(a) A right to share in the surplus of the society by way of dividend or bonus
(b) Enjoyment of all the services provided by the Sacco including savings and credit facilities
(c) The right to submit projects or initiatives on improvement of the Sacco services for consideration by the Board.
(d) The opportunity to appoint nominees

Be careful with fast growing Saccos!!!

People, Processes and Systems should be in place before Saccos go “viral.”  A Sacco growing fast is not a bad thing but management should make sure they are ready for it. I have witnessed some societies that were just recently registered that have opened up branches across the country raising questions as to whether they followed the right procedures in doing so.

I will be more comfortable with say Unaitas Sacco growing very fast than with a newly registered society like Good Life Sacco. Unaitas has been there for years and they have the experience running a co-operative business. Its important to have the right people, processes and systems in place before aggressive marketing.

Some of the newly registered societies are usually restricted to operate within a small area of operation e.g. a sub-county or county. Sometimes without close supervision, they expand very fast opening branches all over the country without following the required procedures or sticking to the society’s by-laws especially the area of operation and resolutions passed by members.

I have also realized that some of these newly registered and fast growing societies have hidden intention and the public should be wary of these societies and inquire appropriately before committing. Hidden agenda specifically boils down to management/board of directors. Some of them have no intention of exiting the board and have carefully orchestrated an election “system” where they get re-elected year on year out. They use intimidation or membership ignorance to continue being in office. They have somehow put in place an election policy that they sneaked into a general meeting and had it approved that assures assures them of re-election. I still believe an election nomination process that excludes independent persons, is a sham. How can a nomination committee be composed of same people in the management committee who are to be subjected to an election process and to make matters worse, end up nominating exact number of people required? Isn’t this an election carried out by board and not members of the society?

Some of the fast growing societies have also sometimes close relationship with the church or the company within which the membership is drawn. They have what they call “a patron” who has way too much sway when it comes to societal matters. They fail to note that the society is an autonomous and synonymous organization. That the society can be sued, it can sue, own both movable and immovable property, etc. The membership in this scenario has been reduced to the role of attending meetings….just to fill the hall!! They have also failed to note that the Co-operative Societies Act and Rules, does not mention “patron” anywhere!!

I predict very soon, we will have some of the fast growing societies collapsing. This is because they have not considered some of the following issues before going ‘viral’-

PEOPLE: Do you have people in place who will steer and direct the growth? Has the management been trained/educated on basic co-operatives operations, Act, Rules? Does the staff have the required qualifications and experiences? Do the membership know what are the objectives of their co-operative? Do you know the stakeholders??

PROCESSES: Are there loan applications, membership withdrawal, staff recruitment, code of conduct, staff promotion, staff dismissal, elections, investments, dividends payments, etc processes that are known by all concerned? How did these processes come into being? How are meetings conducted management (board of directors), supervisory, management/supervisory and general meetings? Are membership views taken into consideration? How is the management committee, supervisory committee, staff and membership taken into account?  How are disputes resolved? Do you have an ICT system in place to manage the unprecedented growth? Is there a strategic plan for the society? How are shareholders and stakeholders engaged? Is there a risk management programme?

SYSTEMS: How do you manage people and processes in your society? Is there congruence of action within the society? Does these system re-invent or how agile is it? How do you make sure that society’s vision is shared across board? Does this system infringe on people and processes? What is the organizational culture like?

We shouldn’t sit down and wait. The ministries (both national and county) concerned should have policies in place to check on Saccos growth and fund sub-county offices to effectively and efficiently carry out their mandate. Otherwise new kinds of DECI is in the making.

Leadership in Co-operatives

Leadership plays an important role in the management of the co-operative societies. It is the quality of leadership that usually determines the failures and success of a business organization. It has been observed that most of the failures of co-operative societies have because of ineffective leadership.

Meaning of leadership.

Leadership has different meaning to different people. It is the ability to influence people to strive willingly for mutual objectives. It is the ability of a person to make people work in harmony and confidence towards the achievement of the individual, organization and community goals. Some people believe that leaders are born. Others believe that leaders are made through learning experience. Both beliefs are true to some extent. A combination of the two beliefs makes even better leaders. In co-operative societies the committee is the governing authority and is subject to any directions from a general meeting and by-laws of the society.

leaderLeadership styles

There are four different leadership practices which may be classified according to the philosophy of the leaders towards their followers.

  1. Autocratic leader- This type of leader centralizes authority and decision-making himself or herself. There is no participation by the subordinates. They have to do what they are told. The leader takes full authority and assumes full responsibility. This type of leader is usually negative because followers are uninformed, insecure and afraid of the leaders’ authority. Unlike the dictatorial leadership he motivates the subordinates by providing their need satisfaction if they do what they are told to do (I will help you members if you obey me.)
  2. Democratic leader-This type of leader decentralizes authority. He invites the subordinates to participate in tackling problems. This happens in such a way that the group and the leader act as a social unit. The leader hold consultations with the subordinates regarding all problems and adopts and suggestions made by them if they are of use. It is for this reason that the members of the group have regard for the leader (Do you members agree with my views?)
  3. Free reign leader-This type of leader depend largely upon the group to establish its own goals and work out its own problems. The group members provide their own motivation. The leader is passive and the initiative is with the subordinates. This type of leader can produce good and quick results if the subordinates are highly educated and brilliant people. They should also have sincere desire to go ahead and perform their roles with responsibility (What do members think we should do?)
  4. Dictatorial leader-In this type of leadership followers do their work out of fear. They do what they are told. Such a leader threatens the subordinates with penalties and punishment. As a temporary measure such leadership get results but in the long run it fails. This is because it leads to the dissatisfaction of the followers (Your members must do what I say!)

Qualities of a good leader

The characteristics of a good leader in co-operatives cannot be sharply defined but can only be generalized as:

  1. Self confidence – A good leader must have self-confidence based on self-knowledge. This enables the leader to win the confidence of the members.
  2. Ability to communicate- A leader should have the ability to communicate instructions and views to others. One may have good ideas unless he or she can communicate effectively then the members cannot gain from such a leader.
  3. Integrity- Leadership functions best when it is founded on integrity and sincerity. It is more than just being honest. It requires one to have moral soundness and uprightness.
  4. Ability to inspire-A leader should have the ability to exert influence upon his/her followers. Whatever the issue should be for the good of the members.
  5. Intelligence- A good leader should have high intelligence than his or her followers. This should however not be too much higher than that of the members. It is said that the members prefer to be led by the people they can understand.
  6. Courage-A leader must also have courage to do things which he or she believes are right. This means that the leaders should be in a position of making decisions and standing by them.
  7. Flexibility of mind-With a lot of changes taking place in the country socially and economically, it s desirable that a leader should have flexibility of mind. The leader should be in position of changing with circumstances.
  8. Good Judgement-A good leader should have ability to make good judgement and have wisdom to look into the future. This should be for the good of the members and the co-operative society as a whole.
  9. Age-Age to some extent plays an important factor. It is presumed that those that have lived longer have earned experience. It is also quite possible that a young person may assume leadership because of his or her talent/trade.
  10. Time for public service-The most important qualification of a leader is that he or she must have spare time for the co-operative society. A person, who is too busy and does not have enough time to get the problems of the members solved, is not recognized as a good leader.

Matatu Saccos Fiasco..how its fueled and propagated.

The new National Transport and Safety Authority Regulations had an axe to grind with matatu owners just recently. It ineptly, just like its many regulations and directives, said that matatu owners wishing to participate in matatu business, had to hand over their vehicles to Saccos/Companies. Handing over of the matatus to the Saccos under a contract or franchise agreements by the owners to be managed by the Sacco as seen in the draft of the regulations, was a death trap but thanks God it was removed or is it deleted? This industry is full of cartels and corruption plus immorality for your property to land on anyone’s  hands or is it pockets, let alone the Sacco. Why am I negative here and I am all about co-operatives? Probably the good question is, how is all these fiasco in matatu industry fueled and propagated?

1. Most matatu Saccos have two faces. One is the Sacco and another is the Welfare/Self-Help Group. Sacco collects members’ contributions i.e. deposits. Welfare collects what they call ”service fees”. The members’ deposits belongs to the members and the same is refunded when one leaves the Sacco (for well run Saccos otherwise forget it) and is also used to secure loans from the society. The ‘service fees’ is used to pay route inspectors and those guys who make noise on the stage whatever we refer them to. Sometimes this money also pays for sitting allowance of the management committees/board of directors and to bribe various councils to allocate them  parking space “shimo” or where they pick passengers. This money is also used to bribe the police, that’s why some Saccos never stop at a police roadblock even when overloaded or when “battered,” battered here meaning a wreck. Of course you know those matatus that are not roadworthy and you have that feeling that it could just break into pieces while at 120 km/h!! 🙂 . Sometimes back I had sat between the driver and and the other passenger and there was so much heat coming from the engine that I literally felt my ‘fundamentols’ getting fried bila mafuta!!

2. Most Matatu Saccos did not wake up and say “lets form a Sacco”. They were FORCED to. We all remember the directive of forming a company or a Sacco if you wanted to invest in this industry. This is totally, my opinion, against the Constitution Chapter Four-Bill of Rights that states: 36. (1) Every person has the right to freedom of association, which includes the right to form, join or participate in the activities of an association of any kind. (2) A person shall not be compelled to join an association of any kind.

The constitution also states: 40. (1) Subject to Article 65, every person has the right, either individually or in association with others, to acquire and own property––(a) of any description; and (b) in any part of Kenya. (2) Parliament shall not enact a law that permits the State or any person— (a) to arbitrarily deprive a person of property of any description or of any interest in, or right over, any property of any description; or (b) to limit, or in any way restrict the enjoyment of any right under this Article on the basis of any of the grounds specified or contemplated in Article 27 (4).

But here we are and we cannot enjoy our properties as individuals but do enjoy though grudgingly through Saccos and companies. Co-operatives work well where its members have voluntarily and openly joined them and where members (read matatu owners) saw the need to form the Saccos. You cannot tell people that “you have to be in a group so that this and this can happen…..” where are the group dynamics, the trust, the willingness to participate fully in cash and ideas, the commitment, the faith, etc. I find the directive lazy and assuming too many things. It is like they sat down and said…okay Saccos have really worked well for so and so, so we can replicate the same and we might even end up not having work to do but sit and reap!!

3. And let us admit, Saccos after the directive were haphazardly registered. I remember meeting one where the chairman did not even own a matatu and some Saccos had the membership of below ten contrary to the Co-operative Societies Act Cap 490 Section 5(a). Also the matatu cartels registered Saccos and most of those fronting for registration did not own matatus or were the “route” owners!! Yes, people/cartels own routes and you have to part with a lot of money if you wanted your vehicle/s to operate on the routes.

4. Regulation 5 of the National Transport and Safety Authority (Operations of Public Service Vehicles) Regulations states: 5(1) A person desirous of operating public service vehicles shall be a member of a body corporate which shall (a) be licensed to operate if the body corporate owns a minimum of thirty serviceable vehicles registered as public service vehicles or in respect to which an application for a license has been or is to be lodged with the Authority.

This regulation forgot what Section 5(a) of the Co-operative Societies Act states…For a society to be registered under this Act, it must—(a) in the case of a primary society, consist of at least ten persons all of whom shall be qualified for membership of the co-operative society under section 14. This means ten people cannot form a matatu Sacco even if they have 29 matatus!! These Regulations were made by Cabinet Secretary for Transport and Infrastructure in consultation with the Authority (i.e. National Transport and Safety Authority). The Co-operative Societies Act  Cap 490 is an act of Parliament!! Your verdict is as good as mine!!! 🙂 Pecking order HAS ALWAYS BEEN-The Constitution of Kenya-Acts of Parliament/s-Regulations/Rules not the other way round. Regulations DO NOT TAKE PRECEDENCE OVER an Act of Parliament.

This tells you that National Transport and Safety Authority is at fault of not engaging all stakeholders and this only propagates the mess in this sector.

5. Police. A backache in this industry. Loose cannon. Reeks incompetence. No more words here.

6. Kenyans. Passengers. We are just there…….then accidents happens and we make noise and pray then we revert to just being there. I have never understood why we still enter a full matatu and still pay the same fare everybody else sitting comfortably is paying. I have never understood why saying NO is so difficult when an injustice is being propagated by driver and his conductor. I tried once making noise when the conductor demanded fare from a six year old who had been accompanied by a 13-year-old or so sister arguing that the kid had sat down. Mind you, the back seat where they were had three people plus the kid!!! I was almost dropped off and the painful thing is everybody kept mum!! I have never understood why when the conductor says “tusaidiane hapo” and passengers make “space” where there is none for another 120 kg plus human being!! I have never understood why we never say to the driver, stop overtaking on the wrong side or over-speeding or picking a call when he/she is driving.

Matatu Sacco management know this and fully exploit it. They know we cannot do anything. They know that we Kenyans feel that we are being given favour by them!! And they know we are always in a hurry and that we can sit anywhere there is space for a small-sized rat.

Police also know that we Kenyans cannot do anything. One, they have allowed not so roadworthy vehicles to operate as matatus therefore most likely they don’t have seat-belts and therefore we feel relieved when the police just checks us out and lets the matatu go when he/she gets the Ksh. 50. Two, the police own the vehicles too. Three, they implement the law, they starve…they have gotten so used to bribes that is part of their salaries and the good thing is that this is not taxed!! Four, we all like when police stops a vehicle and smiles or makes a joke, we are that easy 🙂

Good day.

Annual General Meetings are Here!!!

This is the time all co-operatives that have their financial year as 1st January to 31st December are holding their annual general meetings. Members’ expectations of course is tied to interest on deposit and dividends. People are making calls to know what percentages they are getting for the previous financial year. Some are making calls to know who is retiring in the management committee and who are contesting. Most probably nobody is sending their agendas to be considered for discussed at the AGM.

Most co-operatives only meet once in a year whether through the delegates system or whole membership attending the AGMs. Sometimes the agendas are so congested such that all of them are not discussed and some important agendas are postponed till the next AGM!!! That is 12 months or more of delay!!! So how do we get out the most from these meetings as societies or as members??

The societies…..

1. Membership/delegates should be informed earlier as stipulated in the societies’ by-laws. All of the agenda clearly stated. AOB (Any Other Business) shouldn’t be encouraged always as this ends up consuming more time. Members should be encouraged to present their agendas to the secretary early enough to be considered for discussion in the AGM.

2. Keep time. I have attended many AGMs and keeping time is a big problem. Members and even the board of directors/management committees most times never arrive on time. On average meetings usually start 2 hours later after the stipulated time even 4 hours later is not uncommon!!. This discourages some members who usually arrive early and they are also converted to late comers of AGMs. Also late meetings will lead to all the agendas being not discussed sufficiently and resolutions too will not be of quality or well thought out as the early birds will be tired.

3. Keep to the agendas. I have been to meetings where the chairman loses the control of the agenda and the membership end up discussing other things. This will to lead meeting being prolonged and members exhausted and therefore failure to finish all the agendas or have effective meeting.

4. Let the presentations be brief and to the point. Some people when given time, will bore members to death and it happens that these people are poor in reading body language. Difficult to them to know if members are bored. These people are sometimes not time conscious and most times they are the ones that arrive late for meetings!! It is important that societies’ appoint a time-keeper who will notify speakers if they have finished their allocated time.

5. Do not give drinks when the meeting is ongoing. It is better to have a short break rather than you have a presenter on the floor and someone is distributing drinks or food. Membership ends up not listening or their concentration is interfered with because of the movements and noise. Better, provide water before the meeting starts.

6. Use public address system if member numbers exceed 100! Some people are inaudible and they end up talking on the podium with the first and second rows and the rest of membership wonder what the person in front of them is saying!!

7. Switch phones off or have them in silent mode. I have witnessed several members of the societies an even board members, receiving calls when the meeting is ongoing. That is RUDE!! If the call is important, walk out with minimal noise.

8. It is good to take questions first and then answer them instead of taking one question and answering that one question before going to the next question. This saves time.

9. The societies’ minutes should capture all the relevant issues being said and proposers and seconders of those issues. It will be easier to pick up from where the societies left from the previous meetings.

The membership/delegates……..

1. Come with a pen and a paper and note all the points you thing are important or questions you will need clarification on.

2.Be patient and let there be order in asking questions. If your question has been asked, do not ask the same thing again.

3. Learn to arrive early as stipulated in the notice convening the meeting. It is good to be time keepers by reminding the management/board/members/delegates if they are taking too long to start or spending too much time on a topic or a point.

4. Be constructive. Remember the supreme authority is the AGM. Whatever is discussed or passed in these meetings as resolutions are what will determine the future of the co-operative society and also the ramifications are far much greater and do not stop at you. So be helpful.

5. Restrict your movements. Some are particularly annoying and cannot be in a meeting for more than ten minutes continuously. They usually keep dragging everybody else on same issues that have been asked or discussed time and again.

Probably there are more points that I have missed, but hope that the message has been driven home here….cheers!!

 

 

REACTIVE LEADERSHIP IN COUNTRYWIDE SACCOs A NAGGING BUG!!

I will refer to this article Will Saccos Die in the Devolved Governments Era I wrote here sometimes back and how the leadership of countrywide Saccos have failed their membership despite the impending difficulties. I had said that remittance could pose a challenge, and it sure did and is still an ongoing challenge. We all read these story Ukulima Sacco freezes staff loans on Daily Nation and you wonder how comes the leadership of Ukulima and other countrywide Saccos did not anticipate this problem and come up with measures to safeguard their members funds beforehand. 

The leadership of co-operatives in Kenya are sometimes laden with incompetence beyond your imagination. Yes, you can see buildings with names of co-operatives written on them and see suited men and women looking important heading to board meetings. But the truth is, most don’t measure to the task. They are ineligible even to attend a baraza in a village.

Devolution was coming. Staffs of certain sectors were to be devolved. We all knew this. News were full of these information. But the leadership just sat there and opted to be reactive. The sane thing to do was to visit all 47 counties and establish a rapport with the salary sections. Provide them with Sacco details and make sure to get contacts of all the 47 counties so that whenever the monies are not deducted as provided for in the deduction list or remitted within the stipulated time as per Section 35 of the Co-operative Societies Act, then you know who to contact and not just sit down and telling your members that you are waiting!!! Get realistic what are you waiting for? Your Saccos to collapse due to impending financial challenges?

GHRISIt is a high time the leadership of the co-operative movement embraced technology. The government through GHRIS (Government Human Resource Information System) has provided (is it functional? Doubt it!!) an online platform where third parties e.g. Banks, MFI, Saccos, etc can login and access their members details. It would have been a relief if they could have used the system to provide deduction list or access individual members and have deductions posted for that particular month. This would have made it easier for county governments who in return would have paid the net salaries to its staffs and paid the various societies their members’ contributions within stipulated time. Things would have been easier and efficient instead of sending deduction lists to the 47 counties……this is where I start thinking if there is anyone out there who matters and has read what I have put here hehehe 🙂 Anyway, that is they way of the future. Cheers.

 

%d bloggers like this: