By Tindi Sitati
Uncollected solid waste is one of the most visible environmental challenges facing Kenya today. Many counties lack waste collection systems in place and the situation is worse in informal settlements. This challenge has created a multi-million-shilling industry over the years, that has seen private waste operators independently involved in various aspects of waste management.
The global cost of solid waste management, according to the World Bank is estimated at 17.6 trillion shillings annually. Despite these economic contributions, waste collectors have been left out of waste management chains and are not legally recognized as workers. Moreover, because they are mostly unorganized, they have a weak bargaining position as compared to middlemen.
The co-operative business model can be a pathway to transition informal economy workers like waste collectors to the formal economy through strengthening their collective voice and representation.
Kigro Recyclers, a youth-owned and managed waste collector’s worker co-operative based in Langata constituency in Nairobi is redefining waste collection for members through providing meaningful work. The group of 18 members – was formed in 2017 with a goal to tackle the growing problem of unemployment and garbage collection. Through training from Global Communities, USAID CLEAR Program, members transformed their waste collectors’ group to a worker co-operative, owned and managed by workers who are also members. Kigro provides garbage collection services through residential subscription programs, and they also recycle goods like plastics which they sell to generate income for their members. The service of collecting, separating and commercializing recyclable material is a means of poverty alleviation and has improved member income opportunities and livelihoods.
“When we started, we collected waste in handcarts, but later we received a loan and were able to buy a truck that we use for our garbage collection services,’” Rogers Rombe Chairperson, Kigro Recyclers.
Maintaining a decentralized business structure and ensuring democratic functioning is not easy. It requires an effective process that is supported and understood by all. To achieve this, members agreed to have specific responsibilities and authority allocated to each of them to ensure timely and effective decisions are made that will fulfill the co-operative’s goals. “The board through consultation with members makes decisions on where the co-operative shall dump waste. It must be a legal dumping site. The management on the other hand makes training and marketing decisions,” said Alex Kariuki, Treasurer.
Members who joined the Kigro Recyclers went from being self-employed to being member-owners of the co-operative and they soon realized the benefits of collective bargaining, using the co-operative as a platform to negotiate rates with clients.
“We pay our workers on a daily basis; they have families and rely on day-to-day salary to survive. We are still a young business and are not making a lot of profits and so the little we get we redirect to our savings because our goal is to buy a second truck,” said Kariuki.
Kigro Recyclers has formalized the world of work for waste collectors in the waste management chain and members appreciate regular work and earnings, which have brought a sea-change in their lives.
The Government and stakeholders can formally recognize worker co-operatives in different sectors including waste management as an occupation and provide legal identity to workers and their co-operatives. This will encourage participation of worker co-operatives in policy-making processes that would contribute to livelihoods and economic growth.
How Policy Innovations Can Strengthen Cooperative Businesses in Kenya
By Maureen Gitau
Registration of cooperative businesses is a challenging issue for policymakers and stakeholders in the cooperative sector. Under Schedule Four of the Kenyan Constitution, cooperative development is a fully devolved function, meaning oversight for cooperatives was transferred from the national government to county governments, including the transfer of powers and funding. Devolution is important because it ensures that decisions are made closer to the local people, communities and businesses they affect. Some counties have taken up the registration of cooperatives at the county level, resulting in challenges related to dual registration, lack of clear guidelines on the registration of cooperatives doing business in more than one county, and how to maintain cooperative registries at both the national and county levels.
To manage these concerns, the National Cooperative Development Policy, 2019 — approved by Parliament as Sessional Paper No. 4 of 2020 — provides that the national government is responsible for the registration and cancellation of cooperative societies. These registration issues are critical and call for policy innovations that make it possible for cooperative businesses to thrive. There is a dire need to institute novel procedures for the documentation and data management of cooperative businesses’ registries.
Christiansen J. & Bunt L. (2012) advocate for the need to make the best possible use of public resources to create better outcomes for the population rather than merely ensure ‘service delivery.’ The intention of devolution, or decentralization, to bring services to the people is not enough when marred by inconsistent procedures and processes. The inconsistencies are made worse by a lack of access to information, thereby disincentivizing compliance. There is a need to come up with solutions that are characterized by an empathic relationship with the concrete situation of the citizen — in this case, cooperatives.
A co-operator in Kenya should be able to register a cooperative business in the shortest time possible, have access to information with clear guidelines and rules as to how to register, and do so on a platform where making payments towards the registration is easy and secure. This is easier said than done, though, as it not only poses a new way of working, budgeting and decision-making for policymakers but also a new way of thinking about how to incorporate innovations in policies.
In 2014, regulatory and legal reforms aimed at enhancing and promoting the ease of doing business in Kenya realized it was important to make the country’s business sector more competitive by streamlining and automating the business registration process. These reforms targeted the incorporation and insolvency of companies in Kenya with a view to creating an environment where businesses can thrive. The success of doing business in Kenya through the Business Registration Services (BRS) online platform provides a precedent for similar reforms in the cooperative sector.
Rather than maintaining the status quo, can public interventions create explorative processes that uncover and make use of untapped potential? The national government can reduce the cost of doing business by developing and adopting simplified processes that improve access to services and create new channels for revenue collection. In trying to resolve the issue of registering cooperatives and increasing compliance, is there an opportunity to develop a digitized registration system? A digital system could help reduce duplication, ensure prioritization and tracking of applications, and minimize political interference in the registration process.
Reforms cannot operate in a vacuum. Sector stakeholders need to have an open public-private dialogue on how this idea can be implemented. Advances in digital government-to-business (G2B) processes have the potential to automate and organize information much more dynamically, which would strengthen cooperative businesses, eliminate unnecessary red tape and simplify complicated administrative procedures and processes. This re-envisioned digital registration system would allow the Government of Kenya to play a more facilitative role in full view of the cooperative database at both levels of government as well as through shared decision-making.The writer is a Policy&Legislative Affairs Officer for Global Communities’ Cooperative Leadership, Engagement, Advocacy & Research (CLEAR) Program. The article was first published by Global Communities https://globalcommunities.org/blog/
SUCCESS STORY: Kenyan SACCOs help Women Turn Entrepreneurial Dreams into Reality
By Linda Karimi
Nancy Kariuki was a licensed pharmacist who wanted something more: she dreamed of becoming an entrepreneur. Eight years into a career in sales for drug companies, at age 40, she finally took the plunge.
Keenly aware of the challenges women-owned businesses face, Nancy had been saving money over the years, and by 2020 had amassed Sh1 million (approximately $7,300) in start-up capital.
She opened her business, Essos Pharmacy, in the central business district of Kerugoya, a town of 15,000 in central Kenya.
Nancy was successful for two years in establishing and growing the business. But, in 2022, Essos was struggling to meet increased demand caused by the COVID-19 pandemic. She needed capital and turned to Fortune SACCO. SACCOs, savings and credit cooperatives, are a popular financial services option in Kenya.
Members of SACCOs invest in them or make deposits and can use that value as collateral when borrowing from the institution. They often can borrow more from a SACCO than from a bank and at a lower interest rate.
Fortune SACCO is one of ten SACCOs participating in a USAID-funded World Council of Credit Unions project under the Cooperative Development Program (CDP) called Technology and Innovation for Financial Inclusion (TIFI). The project seeks to enhance the capacity of SACCOs to lend to micro-, small- and medium-sized enterprises through improving credit risk management, streamlining and simplifying the lending process, and increasing the number of quality financial products available to these businesses.
Fortune granted Nancy a loan sufficient to do what she most wanted – create new jobs. She hired a staff of four, after previously relying only on her husband for extra help. She also enrolled her employees in the National Housing Insurance Fund and the National Social Security Fund, which provide them with healthcare, a pension and social protection.
Nancy also used the money she borrowed to upgrade her point-of-sale and inventory system. She now has more visibility over the operations and financial position of the business. The data also enhances her ability to borrow money in the future, and at a lower cost, because she can now provide reliable financial statements to lenders.
Within a year, the business tripled its revenue and now competes with larger pharmaceutical businesses as a key player in the market. Nancy’s success not only contributes to the economic growth of the community but also provides a source of inspiration for other women entrepreneurs in the area.
The USAID/CDP-TIFI project is transformative because it unlocks the potential of SACCOs such as Fortune, improving how they lend to micro-, small- and medium-sized enterprises. SACCOS in turn helps unlock the potential of those businesses, such as Essos Pharmacy, and people like Nancy, who turned her dreams into reality and improved her community in the process. She is a shining example of what can be achieved with the right resources, determination, and support.
Dividends Are Not Easy Money to Be Splurged; Be Stingy with Them For Thy Sake
By Silas Nyanchwani
I have a personal rule for every cash I receive as profit: I have to buy myself something that can materially remind me that I earned such cash at some point in my life. Because money has a way of evaporating, and if not careful, you may not point out where the cash went. So, why not create a memory or have something that reminds you of your discipline and patience?
As the joke goes, in Kenya once you break a Sh 1,000 note, some 800 will disappear. But the bigger mystery is how you can have Sh 100,000 in your phone, pay some small bills like rent, Sh 20,000, utilities, some Sh 17,000, fuel, Sh 5000, repay some debt of Sh 6,000 you owe a friend, sort some digital lender their Sh 10,000 since they have been a nuisance, and in your mind, you will be like, ‘I still have Sh 40,000’. The shock on you when you will check the balance only to find a measly Sh 3,700 remaining. You will not immediately account for the nearly Sh 33,000 that you spent on frivolous stuff while you were thinking that Sh 100,00 is infinite.
If you are poor with money like me, thus you spend cash and budget later, you encounter this problem every time you get some money, say dividends, some loan, or any windfall. There is an African generosity that can be wasteful because it is never checked. Because you will pay for lunch for a friend or two in a high-end hotel, and the Sh 4,400 will feel like nothing when you have some Sh 100,000. You will throw some random round in a bar and some Sh 3,200 will be gone. Charge it to good times, after all, “si ni mkono narudisha”. Then there are some random few hundred we send to our relatives, or the Sh 2,000 we send to a friend who swears they will return it but never do. A gift like this to a female friend, a random girl you met in a bar over the weekend who will call you with an emergency, and such, and you would have chalked up some Sh 20,000 unaccounted for.
And we always feel bad about this, yet we are helpless. Going over your MPESA messages to see where the big mistakes happened is never helpful. It is always the small, small amounts that look insignificant that compound to an unaccounted 35 per cent of your income.
To beat this, there is no shortcut around budgeting. You have to plan for any money you are anticipating. Whether a salary, income from business or any other income stream, don’t be the guy who spends the money first then budgets later. Have some personal realistic rules.
What works for me is admitting that I can be wasteful, and capping the wastefulness. As a rule, 85 per cent of the money has to go to the intended use, no matter what. In these high inflationary times, expected windfalls can help us beat inflation. I recently went shopping and the cost of everything seems to be going steadily up every few months. If you buy toothpaste for Sh 200 today, it will be Sh 340 by the end of the year. And this sucks because incomes rarely keep up the pace of inflation, especially if the economy is going through a rut.
Thus, if there is some windfall coming your way, this is the time you beat inflation. Buy wholesale, buy large quantities that last longer, and save a coin.
The other financial blind spot, especially for men is black tax. Often, we tend to be generous with cash that we didn’t work extra harder for. And most of us can be reckless with it. You receive your Sh 200,000 dividends and you spend a quarter of it meeting the never-ending demands of dependents, parents, or siblings. And since sometimes the help is in small quantities of cash, we don’t think how in the long term this affects our savings. But this need not be the case. Have a cap that you cannot exceed, no matter the circumstances. If you decide 5 per cent of your profit or income is for charitable acts, don’t exceed that. There are only so many fundraisers you can pull off for friends, colleagues, and family. Be mindful of especially for the money that you think came easy.
So, as the year is likely to be tough, this time round there is no luxury to squander our dividends. Reinvest, bolster that business, go slow on lavish spending, cut it down instead, and ensure that you save something for the rainy day. But don’t deny yourself too much. Grab that coconut fish or kienyeji chicken. Get yourself some good poison. Or a good jacket. Something that can remind you that patience has its own rewards. But tone it down.
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