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SACCO INDUSTRY WATCH
Co-operative Alliance of Kenya (CAK), He added, “This is a big compromise on Ototo observed that introducing
the apex body of the Co-operative the security of capital of a SACCO. This social impact members and special
movement says prominent politicians, is because though the capital stands fund trustees will conflict with current
owners of investment clubs and as security to cover the social impact regulatory bodies such as SASRA.
looters of Government money are members, there is no corresponding
likely to push for the enactment of the compensation by way of earnings to “If the arrangement proposed by
amendments as a way of accessing the SACCO.” amendments is to be sustained, how
billions of shillings co-operators have are these ‘independent creatures’ going
saved over the years. The Social impact members as to relate with the regulator and how
proposed in the bill will enjoy more do they fit into the capital adequacy
The major issue of contention is rights in the management of the requirements?” posed Ototo.
in the Statute Law (Miscellaneous institutions unlike current members
Amendments) (No.2) Bill, 2018 which who only enjoys one vote. Since the establishment of the first
asserts the introduction of a new class Co-operative society in Kenya in 1908
of members -Social Impact Members In the late 1980s and 1990s, at Kipkelion, the movement has grown
(SIM) who will be exempted from majority of Co-operative societies to reach over 22,000 registered Co-
payment in respect of membership were subdivided into economically operatives societies, with an estimated
of the society. Other new changes unviable units following the membership of 15 million people.
include creation of a special fund, introduction of Structural Adjustment
investment committee, special fund Programme (SAPs) by the Bretton Commissioner of Co-operatives Mary
trustee, special fund investment policy. Woods institutions -World Bank and Mungai says the bill lacks the input of
International Monetary Fund (IMF). the stakeholders and thus if passed in
The new bill published recently in This resulted to grinding poverty, poor its current nature will destabilize the
parliament seeks to amend the SACCO development, illiteracy, insecurity and entire Co-operative movement.
Societies’ Act 2008 and Co-operative low development.
Societies Act Cap 490. She states that there is need for the
KUSCCO Managing Director George proponents of the bill to recognize the
In an interview, CAK’s Chief Executive Ototo says the new changes seek to input of the Co-operative movement
Officer Daniel Marube said the create a mezzanine leadership structure in the economic growth and social
proposed changes will water down all which will in the long run destabilize integration. For example, the movement
the gain the Co-operative movement the current well-driven governance controls 35 percent of the national
has achieved over the years. structure. savings.
“These proposed amendments, to say “Any change in the laws governing the “The bill is not well thought out and if
the least, have the intent to sneak Co-operative movement must have the movement input is disregarded, it
strangers into the room, who not only the blessings of all the stakeholders. will flout the Co-operative principles
come to scavenge on the goodwill The new changes will in the long plunging the societies into a
and institutional set-up of SACCO run interfere with the principle of governance crisis,” said Mrs. Mungai.
Societies, but also to attack and wreck economic participation and thus
the foundation upon which SACCOs prompt low savings in the country and The Co-operative movement is guided
are build and thus frustrate the saving consequently escalation of poverty,” by seven principles - voluntary and
culture in the country,” said Mr Marube. says Mr. Ototo. open membership, democratic member
control, economic participation
These changes according to the The proponents of the new bill, Ototo by members, autonomy and
Co-operative movement, are meant observes, want SACCOs to accept independence, education, training and
to assist few characters who are in people who the law clearly state information, co-operation among co-
shady business but do not want to are not supposed to pay anything to operatives and concern for community
be checked by the country’s banking be members yet belong to the Co- in general.
regulatory systems. operative.
Marube states that the proposed He added, “That is against economic Mungai warns that once the social
amendments seek to bind SACCO participation principle and democratic impact members are allowed, they will
societies to collect and recover on administration. They should know that literally take over the management of
behalf of social impact members, when you love a monkey then you the societies which members have for
shares, deposits while savings held by have to love its tail. If they love the long labored to develop and maintain.
a member or legible person will act as Co-operative model, then the attendant
security for loan or monies advanced practices have to be adhered to.”
to the legible person.
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