Stima Sacco celebrates 40th anniversary

Stima Sacco celebrated its existence for the last 40 years. The Sacco has employed over 30,000 employees nationwide since it was started in 1974.   During the celebrations, Dr. Chumo who is also the Kenya Power CEO said that 40 years is when life starts and the Sacco should become more aggressive and break new grounds. Stima Sacco, in his view, has reached a stage where it should explore partnerships with international institutions to help it increase facilities and benefits to a growing and diversifying membership. Acccording to the CEO Mr. Paul Wambua, the 40th anniversary presents an opportunity to reflect on the Sacco’s many milestones that include several firsts in the history of the movement in Kenya. He noted that the first Sacco ATM in Kenya was issued by Stima Sacco, they were the first to issue a cheque book despite Saccos not being part of the National Payment System, the first Sacco to do a rights issue and the first such business to be licensed by SASRA as a deposit-taking institution.
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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.

Achievements of Strict Enforcement of the legal framework

  • Kenya Co-operative movement is currently ranked 1st in Africa and 7th internationally. In July 2013 WOCCU recognized Kenya SACCOs as the fastest growing sub-sector in the World.
  • Co-operative enterprises have generated employment opportunities of over 500,000 people and indirectly for 2 million
  • Recovery of Ksh.3.8 billion in SACCOs remittances from employers by 2010 out of Ksh. 4.3 billion arrears that had been outstanding since 2004.
  • SACCOs had mobilized savings to the tune of Ksh.380 billion with asset base of 493 billion as at 31st December, 2012
  • Savings mobilization in the SACCO subsector has been growing at the average rate of 30% per annum.
  • Income to co-operators has increased, e.g. milk-from ksh. 8 to ksh. 38 per litre; coffee-from ksh. 10 to ksh. 140 per kg.
  • There has been tremendous growth of co-operative financial organization into giant financial power houses which surpassed the normal commercial banks and other financial institutions. The Co-operative Bank of Kenya is the 3rd largest bank in Kenya,while the Co-operative Insurance Company of Kenya (CIC), is the 2nd largest insurance in Kenya and the only one of its kind in Africa.
  • The Co-operative sub-sector has two major components, the Government which drives its policy through movement on the other for efficient delivery of service to the members and the general public.

Compiled By:

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

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

Contribution of Cooperatives to the Achievement of Kenya Vision 2030

Kenya Vision 2030 aims at making Kenya a newly, industrialized, middle income country providing high quality life for its citizens.
The Vision 2030 has three key pillars: economic, social and political. Co-operatives contribution to the vision is guided by the seven internationally recognized co-operative principles as illustrated above.
The Ministry of Industrialization and Enterprise Development in its current strategic plan embraces measures that will contribute to the implementation of Vision 2030 Flagship projects as well as
Medium Term plans. The co-operative movement in particular will play the following key functions in delivering Vision 2030:
The Economic Pillar
The Saccos will continue to mobilize savings, developing demand driven financial products which encourage members to save additional resources. This is in line with economic pillar whose key
mandate is to mobilize savings for Kenya’s investment needs. In this regard the Ministry has focused on registration of Youth Co- operatives, transport, Jua kali Saccos and enhancing management of the already existing Saccos through adoption of best accounting, management and governance practices.
In the retail trade Vision 2030 envisages the transformation of informal sectors into an efficient, multi-tiered and production of diversified product range. In this regard the Co-operatives have transformed Jua Kali informal sector with particular reference to transport, community based interest groups, Youth groups into organized Co-operative enterprises.
In the agro-processing sector the Co-operatives are already doing processing and the same is geared towards industrialization. The key Co-operatives in this area are the successful Githunguri dairy,
Limuru diary, Meru dairy which are processing and marketing their products in Supermarkets in Nairobi and other areas. Meru Central Union is manufacturing animal feeds products and milling maize flour for the local market.
The Kenya Co-operative Coffee exporters Ltd is assisting the farmers to access international market but is geared towards processing and marketing Kenya Coffee as finished products in the international market.
Social Pillar
The social pillar under Vision 2030 envisages to transform the eight social sectors namely education and training; health; water and sanitation; environment; housing; gender, youth and sports.
The Co-operative Movement and in particular the savings and credit Co-operative Societies (Saccos) mobilize billions of shillings to finance education from Primary to University through affordable loans to the members. In addition they provide credit facilities to meet agricultural, medical and legal services. In
housing, Co-operatives facilitate members to pool resources to buy plots and to finance construction.
The National Co-operative housing Union (NACHU) and Kenya Union of Savings and credit Co-operative society Ltd, through housing scheme are financing long term mortgages for individuals and societies to put up houses. Some of the land mark buildings in Nairobi e.g. Harambee, Imenti and Ukulima Plaza are owned by co- operatives.
The Co-operative active participation complements government efforts of putting up 150,000 housing units in urban areas. The Co-operative will play pivotal role in realization of the social pillar in Vision 2030.
Political Pillar
The Vision 2030 0n the political pillar envisages to create “a people centred and politically engaged open society”. The Co- operatives are economic based and are driven by economic needs. In this regard the Co-operative brings people together irrespective of class, social status in life, ethnicity or other
considerations. The Co-operatives have institutionalized democratic culture through engagement in free and fair elections. The Co-operatives therefore form the bases and the building blocks for a cohesive society and enhances issue base and politics economic survival. 10.0 Emerging Issues in Co-operative Marketing
 Value addition is done by some co-operative societies: e.g. New Kenya Cooperative Creameries (New KCC), Githunguri, Meru Central and Kenya Coffee Co-operative Exporters (KCCE). These co-operatives will continue value addition under vision 2030 in order to control larger part of product value chain.

 Co-operatives will also play a vital role in input supply and distribution. Through Kenya Farmers Co-operative Union (KFCU) they will participate in bulk fertilizer importation and distribution using the existing infrastructure (stores, vehicles and machinery) owned by co-operatives and unions.
 Promotion of producer-based groups/co-operatives. In order to address the problems of fragmentation and informality that exist in supply chain, the ministry will encourage linkages between the formal market operators (wholesale and retail hubs), e.g. supermarkets and producer co- operative organizations.
 The development of Diaspora co-operatives (SACCOs) – Already the Ministry has promoted two Diaspora SACCOs in America and United Kingdom (UK) in order to tap enormous resources generated by this subsector to channel into the country’s investment opportunities.
 Matatu SACCOs- In order to streamline and promote viable investments in transport subsector, the Ministry in collaboration with the Ministry of Transport and Infrastructure has already registered 600 Matatu SACCOs in the country.

 Sharia Compliant Co-operatives. In order to promote and tap investments from the Muslim community, the Ministry has established Sharia compliant co-operative by-Laws to roll out
products geared towards this segment market. The Sharia compliant co-operative policy is underway. The following 4 Sharia Compliant Co-operatives are already registered; Cofi Sacco Ltd, Cresent Takaful Sacco, Taqwa Sacco and PumwaniRiyadha Sacco Ltd.

 Housing Co-operatives- With the country experiencing an acute shortage of housing, especially for the low-income segment of the population in urban settlements, the Ministry has promoted 440 housing Co-operatives. However, these housing programmes have stagnated due to lack of affordable mortgage facilities and long term lending to assist in housing development. Besides; poor planning, high cost of
construction and building material and the complex land administration mechanisms discourage investors/co- operatives in committing funds for housing projects.
 Youth Co-operatives- The Ministry in collaboration with USAID, has registered and supported 27 County Youth Bunge SACCOs in order to engage the youth in gainful business enterprises. These SACCOs have already mobilized Ksh. 10 million savings and loaned out Ksh. 7 million. In January 2014 USAID will inject Ksh.8 million grants in form of a revolving fund to this programme.

Compiled By:

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

Global Perspective of Co-operative Movement in Kenya and International Obligations

The Kenyan Co-operative Movement is rated 1st in Africa and the 7th global among the developed movements. This rating is by the international Co-operative alliance. The Sacco Movement in
Kenya was admitted to the group 10 of the most developed Sacco Movement globally.
The members of group 10 are Kenya, Ireland, United States of American, Brazil, Mexico, Poland, Australia, Caribbean, Canada and Costa Rica. Kenya is represented in the group 10
by Kenya Union of Savings & Credit Co-operative Ltd (KUSCCO).
It should further be noted that Kenya offers consultancy services on Co-operatives to various countries in Africa, e.g. Rwanda, South Sudan and South Africa among others and has developed an MOU with the Ethiopian Government for Technical Cooperation Program.
The country through the various National cooperative Organizations and CAK which is the Apex is represented in the international cooperative movement. The movement in Kenya is a member of;
 International Cooperative Alliance (ICA)
 World Council of Credit Unions (WOCCU)
 Africa Confederation of Savings and Credit Associations (ACOSCA)
 International Cooperative Mutual Fund (ICMF)
This membership is in line with the international cooperative principle “Cooperation among  cooperatives”.

Compiled By:

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

Historical Background of Co-operatives in Kenya

In Kenya the history of cooperatives date back to 1908 and has continued to grow since then;

  1. 1908- first Co-operative Society was established in Kenya, a dairy Co-operative
  2. 1931 –Government’s first formal involvement in Cooperatives when the first Co-operative Ordinance was enacted to regulate the operations of co-operatives.
  3. 1946 -Inclusion of Africans in the Movement when the colonial government acknowledged that Africans needed to participate in the economy through co-operatives resulting in the enactment of a new Co-operative Societies’ Ordinance.
  4. 1955-African involvement in the growing of cash crops following the Swynnerton Plan paved the way for the formation of more co-operatives.
  5. 1932 – 1969; 1,894 societies had been registered.
  6. These first co-operatives were Predominantly marketing oriented & Auxiliary focus,
  7. Key examples then were Kenya Co-operative Creameries (KCC-1925), Kenya Planters Co-operative Union (KPCU- 1923) and Kenya Farmers Association (KFA-1923).
  8. These organizations were originally registered as companies and only became registered as co-operatives in 1931 when the first Co-operative Ordinance was promulgated.
  9. 1965-The sessional paper No. 10 of 1965 on “African Socialism” gave impetus to rapid Africanization of Kenyan economy and poverty eradication based on principles similar to those adopted by the co-operative movement.
  10. 1970-The first post-independence Government Co-operative Development Policy was contained in Sessional Paper No. 8 of 1970 whose main goal was the consolidation of the co- operative activities.
  11. This included improvement of management of societies, intensification of education and training for members, 4 committee and staff with provision of government support staff as supervisors.
  12. 1975- Another review of the Co-operative Development Policy took place in which the government continued to recognize co-operatives as vital organs for mobilizing material, human and financial resources for national development.
  13. The government reiterated its commitment to pursue and promote expansion of co-operative activities in all the productive spheres of the economy.
  14. 1980s –The government started implementing Structural Adjustment Programmes (SAPs) for a market economy. Sessional Paper No.1 of 1986 on “Economic Management for Renewed Growth”, emphasized the importance of unfettered (free) private sector led economic development.
  15. The government through Sessional Paper No. 4 of 1987 on “Renewed Growth through the Co-operative Movement”, reiterated its commitment to enhance the participation of Kenyans in the economy through Co-operatives.
  16. The responsibility of organizing and managing co-operatives was left to the members and their management committees while the government played an advisory role.
  17. The Sessional Paper No. 1 of 1994 on “Recovery and sustainable Development to the Year 2010” reaffirmed the need for a private sector led economy to accelerated and sustained development.
  18. Through Sessional Paper No. 6 of 1997, on “Co-operatives in a Liberalized Economic Environment”, the government reviewed its involvement in the management of co- operatives by providing a legislative framework under which co-operatives were to survive in a competitive economic environment.
  19. The enactment of the Co-operative Societies Act No. 12 of 1997 removed completely the government’s role in the affairs of co-operative societies. This resulted into a near collapse of the entire co-operative movement in the country. Improved governance through Legislative and Institutional Reforms
  20. Recognizing the urgency to preserve and maintain the role of co-operatives in national economic and social development, the government vigorously pursued legislative and institutional reforms in order to forestall the imminent collapse of the co-operative subsector.
  21. Consequently, it amended the Co-operative Societies’ Act No. 12 of 1997 vide the Co-operative Societies (Amendment) Act No. 2 of 2004 and prepared new Co-operative Societies Rules,2004. This also revamped the role of Co-operative Tribunal Court, a specialized Co-operative Commercial Court, to fast track and speedily dispenses the backlog of cases previously pending. This is the first Tribunal of its kind in Africa and many countries are consulting on how to establish Tribunals in their countries.
  22. In recognition of the growing importance and sophistication of SACCOs, a SACCO Societies’ Act was enacted in 2008 to pave way for vigorous enforcement of prudential standards for SACCOs with FOSAs. This gave rise to SACCO Regulatory Authority (SASRA). The body charged with the responsibility of regulating deposit-taking SACCOs.
  23. There was also the drafting of co-operatives’ management guidelines and Prudential Standards on inspection and inquiries which led to entrenchment of good corporate governance and best business management practices. This was achieved through the establishment of Ethics Commission for Co-operative Societies (ECCOs) and the strengthening of the Audit Department.

Compiled By:

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

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