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SACCO INDUSTRY WATCH
Proposed legislation will
not cure any mischief
By Geoffrey Njang’ombe
Senior Deputy Commissioner For Co-operative
Development
Iwould like to raise my concern This class of new members shall only state inter alia “The Commissioner
on the intended amendment of vote on resolutions in relation to special shall be responsible for the growth and
both the Co-operatives Societies fund, investment committee and special development of co-operative societies
Act and SACCO Societies Act fund trustee. Other members of the by providing such services as may be
as advertised by Parliament on society shall not be entitled to vote on required by co-operative societies for
the Daily Nation of 7th May 2018 matters reserved for the special impact their organization, registration, operation,
inviting the public for submission members. advancement, dissolution and for
of memoranda on Statute of Law administration of the provisions of this
(Miscellaneous Amendments) (No. The creation of a special class of Act”; and denying a section of members
2) Bill, 2018.The amendments seek memberships negates the philosophy, from participation in decision making of
to create a class of Social impact principles and values of co-operatives any Co-operative business is contrary to
members under section 17(2) of Co- on segregation based on class, gender, co-operative principles and values.
operative Societies Act and create a creed, religion and color. Exempting
special fund by inserting a new section some members from payment of Co-operatives by nature are association
47a under the SACCO Act. membership fee is against the co- of persons and not capital. Co-operative
operative principle number 3 on principle number 2 on democratic
While I am not against the economic member participation which member control stipulates that co-
amendment, it is important to look at requires all members to contribute operatives are democratic organization
the merit of the proposed changes to equitably to economic activities of the controlled by their members who actively
the Co-operative legislations. In my co-operative. participate in setting their policies and
considered opinion, the essence of making decisions. Co-operatives members
such amendment would be twofold: The amendment does not also define have equal votes on all matters pertaining
either to address a gap or fix some who is a social impact member and as to co-operative business. This is also in
mischief. The proposed amendments to how their interests can be addressed contravention of Co-operative Societies
do not seem to address any of these. through Co-operatives. Act Section 21 on rights of members.
The proposed amendments create The approval of the resolution The Miscellaneous amendment Bill
a class of social impact members of establishing Special Impact Members proposes to amend the SACCO Societies
the co-operative societies subject by the Cabinet Secretary denies any Act, (No. 14 of 2008) to create an
to approval of the Cabinet secretary. aggrieved party right to appeal. The exemption to the restricted investments
These members are to be exempted approval by Cabinet Secretary is also that a SACCO society is permitted to
from payment to the society in respect inconsistent with Section 3 of the make. The bill seeks to provide for the
of their membership. Co-operative Societies Act which establishment of a Special Fund by SACCO
SACCO Star Magazine |15
