By Erick Mwai
The government’s commitment to positioning SACCOs as crucial drivers of economic transformation was underscored during the inauguration of the Tower SACCO Plaza in Nyandarua County.
In an address read on his behalf, President William Ruto highlighted the cooperative business model’s unique ability to aggregate human and capital resources, aligning with the government’s economic transformation agenda.
SACCOs currently hold over Sh1 trillion in savings, representing a substantial 30 percent of the national savings. Harnessing the potential of SACCOs, the government aims to utilize them as intermediaries for the second and third products of the Hustler Fund, thereby promoting financial inclusion.
The President’s address, delivered by Chief Cabinet Minister Musalia Mudavadi, emphasized the Fund’s role in improving liquidity, diversifying membership, fostering a savings culture, and ensuring sustainability through digitalization of products.
To facilitate these objectives, the government highlighted several measures. The implementation of Sessional Paper No.4 of 2020 on National Cooperative Policy stands as a guiding framework for promoting cooperatives’ socio-economic transformation. The paper outlines policies encompassing legal, institutional, and capacity-building aspects of cooperatives in a devolved system of governance. Furthermore, the government intends to introduce a draft Cooperative Bill to Parliament for debate, aligning with the provisions of the Sessional Paper.
Aiming to enhance the effectiveness of SACCOs and mitigate financial risks, the government plans to amend the SACCO Societies Act. The proposed amendments will establish a central liquidity facility and a shared services provider, bolstering cooperatives’ service delivery to their members. This initiative will also enhance liquidity within the SACCO sub-sector by facilitating short-term inter-SACCO borrowing and access to the national payment system.
In addition to these reforms, the government is focused on revitalizing key value chains in agriculture to uplift the livelihoods of farmers. Sectors such as dairy, pyrethrum, horticulture, leather, textile and apparel, edible oils, tea, fishing, maize, and other cereals will receive special attention. By revitalizing these value chains, the government aims to stimulate economic growth and improve the overall well-being of farmers.
During the event, Cabinet Secretary Chelugui highlighted the need for additional cold storage facilities for potatoes in Nyandarua County, which accounts for 33 percent of national potato production. Due to inadequate storage, a significant amount, ranging from forty to fifty percent, is lost during post-harvest stages. In response, the government assured that it would source additional cooling plants to serve Kipipiri, Kinangop, and surrounding areas. Furthermore, plans are underway to establish a plant to assist farmers in Londiani, Keses, Timboroa, and another in Njoro to serve farmers in Elburgon and Molo.
The government also expressed its intention to leverage the existing cooperative structure to facilitate the rollout of affordable housing, universal healthcare, and pension schemes to individuals at the lower end of the economic spectrum. By harnessing the cooperative model, the government aims to extend these vital services to underserved populations.
The President called upon cooperative leaders to continue providing effective leadership that promotes business prosperity, guided by prudent business and commercial practices that align with the aspirations of their members for growth and improved livelihoods.
The government’s steadfast focus on strengthening SACCOs as key pillars of economic transformation marks a significant step toward fostering inclusive growth and prosperity across the country.
SACCO Strategic Plans under Threat, Expert Says
By Ngumbo Njoroge
Savings and Credit Cooperative Organizations (SACCOs) have been advised to stay vigilant against the volatility of the business environment and align their long-term strategic plans to adapt to the changing landscape.
The recent years have presented SACCOs with an unprecedented challenge as business volatility disrupts their carefully crafted strategies, compelling them to reassess their operations and embrace flexibility.
According to Mr Joshua Wambua, a leadership expert, the Coronavirus pandemic and rapid technological changes are major factors contributing to business volatility. He emphasized the need for SACCOs to regularly review their strategic plans at short intervals and assign an officer to monitor the business environment for potential threats.
“Constantly reviewing SACCO strategic plans and monitoring the business environment is crucial. This provides boards and management with up-to-date information on any changes that may impact their strategies,” Mr Wambua stated during the annual Chairpersons and Vice-Chairpersons Forum.
Mr Wambua highlighted the importance of this monitoring process, explaining that without it, SACCOs may continue to invest member resources into strategies that fail to yield desired results. By constantly reevaluating and aligning their plans, SACCOs can re-engineer themselves to adapt to the evolving business landscape, ensuring the best use of resources and ultimately benefiting their members.
During the forum, Mr Wambua urged SACCOs to devote resources to exploring new digital frontiers and building partnerships. He emphasized that embracing technological advancements and fostering collaborations are crucial steps in overcoming business volatility and securing a prosperous future.
“You must have the courage to be future makers, willing to explore new digital frontiers to reimagine today’s world for a better tomorrow,” he encouraged SACCOs.
The SACCOs’ response to the challenges posed by business volatility will determine their long-term sustainability and ability to support their members effectively. By staying vigilant, regularly reviewing their strategic plans, and leveraging technological advancements, SACCOs can navigate the unpredictable business environment and seize opportunities for growth and success.
As SACCOs continue to face uncertainties in the economic landscape, the expert advice provided by Mr Wambua serves as a guiding light, urging them to adapt, innovate, and collaborate to safeguard the interests of their members and ensure their resilience in the face of ever-changing business dynamics.
CS Chelugui speaks on the government’s plans for the cooperative movement
Hon Simon Kiprono Chelugui, Cabinet Secretary in the Ministry of Co-operatives and MSMEs spoke to the SACCO Star magazine on the government’s plans in enhancing the growth of the cooperative movement, and the priority areas on Micro, Small and Medium Enterprises.
For the first time in more than 10 years, we have a Ministry dedicated to Co-operatives and MSMEs. How will the new Ministry help in the promotion and development of Co-operatives and MSMEs in the country?
For the last 10 years, the co-operatives’ function has been anchored under different ministries but in the wisdom of H.E. the President, he put together two departments that have a symbiotic relationship dealing with the bottom of the pyramid. The Ministry has two parallel functions. The central role of the Ministry is to create a coordination platform for all MSMEs and Cooperatives related interventions for policy formulation. The Ministry also develops appropriate financing mechanisms for Co-operatives and MSMEs for example the Hustler Fund and revamping the Youth and Uwezo Funds. The Ministry also coordinates better advocacy policies for both cooperatives and MSMEs.
The year 2021 saw the commencement of the implementation of the Regulations 2020 which governs the authorization, supervision and regulations of SACCOs undertaking specified non-deposit-taking business. Currently, there are 361 regulated SACCOs in the country. What is the government’s plan for expanding the regulatory benefits to more SACCOs in the coming years?
There are a number of actions that we are taking in the SACCO subsector through the regulator SASRA. The objective of regulation is to ensure that there is growth in the sector, protection of members’ savings and inspire growth. The new Cooperative Bill envisages a complete transformation of the cooperative sector which also includes SACCOs and our ultimate goal is to see Kenya develop through the cooperatives. We are also looking at increasing the capacity of SACCOs to cover more SACCOs.
The government is also developing the framework for the inter-SACCO lending facility. How has this been received by SACCOs?
The SACCO central and shared services have been received with a lot of excitement by the SACCOs. I recently launched Coop Tech which brings together over 54 Deposit Taking SACCOs and later launched SACCO Central with over 50 SACCOs. The overall objective of this is to reduce the cost of operation and increases efficiency.
Currently, policies and regulations are pending Parliamentary and Cabinet approval. What is the Ministry’s approach to fast-tracking this process?
When I joined the Ministry there were policies, regulations and Bills that were around for over 5 years. The Co-operatives Bill has been in discussion for about 15 years, the SACCO Central has been around for 5 years. These two documents will be tabled in parliament soon.
The movement is mooting ideas for the expansion of regulation to include housing and investment cooperatives. What are the benefits of this?
We have a shortage of over 250,000 houses in Kenya. As Cooperatives we have over 200,000 acres around the country. We have been yearning for a moment of a partnership between cooperatives and the government to develop this land, and build low-cost housing. The government is currently creating a harmonious relationship between the Ministry of Housing and the housing cooperatives within the cities.
SASRA has called for mergers of some of the small SACCOs. Kindly speak on this and how this will benefit members.
Mergers will reduce the cost of administration and operations, increase efficiency and service delivery, and also improve the pool of savings, making funds available for lending to members. This is an idea that is meant to strengthen now weaken the small SACCOs.
Which other development partners are you engaging in the development of MSMEs in the country?
We have a very clear robust engagement with our service providers. On the Hustler Fund, we have worked with KCB and Family Bank and also worked with the telcos. We have been able to reach over 20 million Kenyans and lend out to those people, riding on platforms provided by the service providers. It shows that public-private partnerships work. We are celebrating the partnerships.
What is the outlook for MSMEs in the country?
In the future, our focus, energy and investments should be in MSMEs. 98 per cent of enterprises in Kenya are MSMEs contributing about 2 per cent of GDP. My duty is to address access to affordable credit which is a big impediment in promoting the growth of MSMEs, second is to facilitate small businesses to access the market. We have a huge market within the East African Community. Our focus is to enhance access to this market because MSMEs may not have the logistical capacity to trade with the rest of the world. We have 300 million people in our East African Community. We should begin thinking about increasing trade among ourselves before thinking about the region.
Deputy Chief Justice Champions Women’s Empowerment at Cooperatives Forum
By Ngumbo Njoroge
Deputy Chief Justice Hon Philomena Mwilu commended women involved in cooperatives for defying negative societal expectations regarding women’s leadership.
Speaking at the 5th Women in Cooperatives Forum, Hon Mwilu highlighted the disproportionate impact of poverty, discrimination, and exploitation on women, emphasizing their underrepresentation in senior leadership positions. She called for a transformative shift to address the scarcity of women leaders in cooperatives, emphasizing the significant role that Savings and Credit Cooperative Organizations (SACCOs) can play in fostering change.
During her keynote address, Hon Mwilu recognized the critical contributions of women to society and the challenges they face due to prevailing stereotypes. Women continue to bear the brunt of poverty, discrimination, and exploitation, struggling to secure senior leadership positions.
To rectify this imbalance, Hon Mwilu emphasized the importance of financial inclusion as a catalyst for women’s full participation in the economy. She acknowledged that gender dynamics often hinder women’s access to financial and economic opportunities, stressing the urgent need for change. By equipping women with the necessary tools and support, financial inclusion can dismantle barriers and establish a more equitable and inclusive society.
Mercy Njeru, Advocacy Manager at the Kenya Union of Savings and Credit Cooperatives (KUSCCO), underscored the significance of leadership training programs in empowering women to assume leadership positions at national and international levels. Njeru emphasized the scarcity of women leaders not only in Kenya but globally, urging women to acquire the qualifications necessary to pursue leadership roles.
Florence Kerubo Omundi, Deputy Commissioner General of Prisons, echoed the sentiment that women must assert themselves and vigorously contend for leadership positions. Omundi emphasized the need for women to challenge societal norms that perpetuate gender disparities and carve out their space in leadership.
The 5th Women in Cooperatives Forum revolved around the theme, “Aggressive or Assertive? Addressing Gender Stereotyping,” reflecting the pressing need to confront and overcome deeply ingrained gender stereotypes that hinder women’s progress. The forum provided a platform for engaging in discussions and the formulation of strategies to empower women and foster a more inclusive cooperative sector.
The event served as a reminder of the ongoing efforts to promote gender equality and create an environment that recognizes and supports women’s leadership potential. Through dialogue, advocacy, and collaborative initiatives, the cooperative movement seeks to dismantle barriers and cultivate an environment where women can thrive and make meaningful contributions to sustainable development.
The 5th Women in Cooperatives Forum showcased a collective commitment to dismantling gender stereotypes and promoting women’s leadership. By addressing the challenges associated with stereotyping and negative gender roles, the forum strives to create opportunities for women to excel and make significant contributions in the cooperative sector and beyond.
- Uncategorized11 months ago
SME financing by SACCOs; a story of innovation and resilience
- Finance and Investment1 year ago
The case for Passive Income
- Business11 months ago
Transforming Trash to Cash: A waste management worker co-operative’s story
- Finance and Investment10 months ago
Limiting loans recovery from Guarantors
- Uncategorized10 months ago
ASK THE LAWYER
- Uncategorized11 months ago
When Inflation Blindsides You
- Uncategorized10 months ago
Priority areas for the new government on co-operatives
- Business8 months ago
How SACCOs can plug into the Hustler Fund