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Embracing a Paradigm Shift: How SACCOS Can Flourish in an Evolving Ecosystem

Challenges began to emerge after the cooperative sector was liberalized in 1997 vide the Sessional Paper No.6 of 1997. That policy shift exposed the soft underbelly of the cooperative sector as a whole as cooperatives had henceforth to contend with stiff competition from established private sector players.



By Fred Sitati

The success story of SACCOs in transforming members’ lives and livelihoods over the years requires no belaboring.
For over half a century, SACCOs have made a significant impact in not only mobilizing domestic savings but also creating a pool of financial resources from which members borrow to finance their diverse needs.
The fact that Kenya’s cooperative sector ranks number one in Africa and number seven globally is no mean feat. Indeed, those engaged in steering the sector deserve a pat on the back!
That notwithstanding, it is also noteworthy that beneath these remarkable achievements, there have been pitfalls and in fact, new ones continue to evolve in the rapidly changing business environment.
Walking down memory lane, challenges began to emerge after the cooperative sector was liberalized in 1997 vide the Sessional Paper No.6 of 1997. That policy shift exposed the soft underbelly of the cooperative sector as a whole as cooperatives had henceforth to contend with stiff competition from established private sector players.
In the cooperative realm, commercial banks and digital lenders emerged to eat into the market share hitherto dominated by SACCOs. To counter that SACCOs, on their part, introduced various types of short-term loans ostensibly to keep competitors at bay.
These were predominantly short-term consumption loans that had the net effect of driving members into becoming net borrowers. This position is still obtained today and has been acknowledged by the government in the National Cooperative Policy, 2019.
As if that was not enough, the introduction of Hustler loans by the government last year through the State Department of Micro, Small and Medium Enterprises (MSMEs) has further exacerbated the situation
A raft of loan products for individuals as well as corporations like cooperative societies and informal groups have been rolled out targeting the same market.
What’s more, the eligibility criteria for such loans are quite attractive hence likely to further lead to SACCOs ceding more ground.
One may therefore ask whether these “Hustler loans” offer healthy or unfair competition given that they are in direct competition with SACCOs’ core business.
It, therefore, behooves SACCOs to counter this onslaught by adopting new strategies going forward since there is always a silver lining in every cloud.

I wish to accordingly propose the following measures for consideration by KUSCCO and its affiliates.
a) There is need to mount effective cooperative education and training for all stakeholders to ensure that they strictly uphold and practice the cooperative principles and values that define the cooperative business model.
In the recent past, this key cooperative Principle number five had taken a back seat!
b) Alongside (a) above, there is need for KUSCCO to develop suitable education and training materials on devolution illustrating how it impacts its affiliates.
c) The Federation to also assist its affiliates in digitizing their bylaws thus enabling them to transact online legally and hold valid virtual and/or hybrid meetings
d) Sensitize affiliates to set up shared platforms to ensure standardization of operations thereby realizing economies of scale
e) Spearhead the promotion of Worker cooperatives across various sectors including the promotion of the use of renewable energy, environmental conservation, health cooperatives, schools cooperatives, and Transformation of Jua Kali associations into cooperatives.
f) In line with the National Cooperative Policy, champion self-regulation in the SACCO sub-sector.
g) Create a robust research and Innovation center to assist its affiliates.
Since the world is now operating in the gig economy, there is need to develop adaptive strategies regularly to remain relevant and competitive.
The above are some of the measures the SACCOs can consider under the prevailing circumstances where, for lack of a better word, they are under “siege”!

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Gender Equality


The majority of the major concerns on gender inequality are as a result of minor inequalities that were not addressed. SACCOs need to pioneer the stemming of these gender biases as they arise.



By Sharon Makiti

The United Nations describes the term gender as the economic, social, and cultural attributes and opportunities associated with being male or female.

Gender qualities therefore are a social construct, that can be recreated in any form. Where there is gender equality, both men and women enjoy equal treatment in terms of access to shared resources, benefits, and opportunities.

Cooperatives are guided by seven principles, among them the principle of voluntary and open membership, which aims at eliminating discrimination of any form, including on sexual orientation grounds.
Major strides have been taken in terms of policy formulation, creating awareness as well as public training by the government, rights groups, and SACCOs towards promoting gender equality.

For instance, most SACCOs apply the one-third gender policy in their management and governance. This has given women the opportunity to contribute valuably towards the growth, development, and sustainability of SACCOs on different levels. SACCOs have also ensured that investment into them through savings as well as uptake of various products and services is equally rewarded.

However, more still needs to be done to provide a level field for men and women economically, socially, and culturally. This is because when there is gender inequality, women will most likely bear the brunt.
More deliberate awareness and training on what gender equality is and why it is fundamental and relevant to SACCOs needs to be done. This will help lay a solid foundation of information to give women a strong voice to stand up for themselves against any form of discrimination.

Also, SACCOs hold member education events regularly, deliberate efforts need to be made to point out and address gender issues. This will increase public knowledge and acceptance of gender inequalities and spur goodwill in addressing them. At this age and time, it should not be uncommon for a woman to be at the helm of a giant SACCO.
Additionally, gender mainstreaming should be promoted in the everyday activities of the SACCO. For instance, it can be made a rule that a board or supervisory committee of a SACCO will not be complete without a certain number of women leaders.

Moreover, more women need to be involved in major SACCO events as chief guests, keynote speakers, educators, mentors, and so forth, in a bid to acknowledge and recognize those who have already broken the glass ceiling and mentor and encourage others. This will also help deal with existing unconscious biases against women leaders and increase their visibility, making the space in the top leadership conducive.

The majority of the major concerns on gender inequality are as a result of minor inequalities that were not addressed. SACCOs need to pioneer the stemming of these gender biases as they arise. Deliberate efforts need to be made to make SACCOs conducive spaces where women can be empowered and thrive to beat cultural, social, and economic stereotypes against them.

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In the news

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.

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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.

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