Cooperatives urge fastracking of cooperative policy

Agriculture Business & Finance Nairobi News Politics

The  continued delays in concluding the cooperative policy making process is impeding the growth and management of  cooperatives in the country.

This has left societies open to abuse by unscrupulous individuals through fake cooperative societies that have already led  to the loss of hard earned monies by innocent members of the public.

Speaking  on Tuesday during a Co-operative Leaders Consultative Meeting to review the Draft National Co-operative Development Policy for Functional Analysis, Cooperative Alliance of Kenya (CAK) Executive Director, Daniel  Marube said  there is a need to agitate for an enabling and supportive environment based on a response policy, legal and regulatory  framework that would catalyze success of a cooperative business model.

“Cooperative model has tremendous positive socio economic impact on more than 14 million Kenyans and hence needs to be  supported,” he said.

He noted that the draft policy in place is a document that outlines the roadmap to prosperity but added the document still  has some gaps that need to be amended.

“In  essence, the  biggest  challenge of the policy is not the policy itself but the two levels of government both national and COGs and I want to urge them to come down and agree on sharing powers so that we know the role of the national  government on cooperative’s and what will be done by counties,” Marube said.

He  cited for instance cooperative leaders who have opposed the introduction of venture capitalists by the national
government in the Savings and Credit Co-Operative Organisations (SACCOs) since they fear if allowed might cause

The  National  Government through an amendment of the Cooperative Act Cap 490 proposed to introduce a new category of members  namely Social Impact Members (SIM) but the proposal elicited sharp reactions within the cooperative movement prompting the  government to withdraw the amendment bill.

The  leaders under their umbrella body unanimously rejected the proposal saying it might create governance interruptions  and be taken over by the investors terming the venture capitalist proposal in the policy as still the SIM idea but in a  non-legislative approach.

“This is a clever way of reintroducing the SIM idea through the law and as leaders we have said it cannot be
introduced; the motive and intent are not the same and we are rejecting the proposal, “ Marube said .

The cooperative leaders have also rejected a suggestion on the age limit that would only allow them to serve for two terms  of office of five years arguing that successful societies even in the developed world leaders are not subjected to age  limits.

“Our institutions are democratic based and so long as elected leaders are able to lead despite their advanced age we have  no problem. Some of the old and successful societies in the country have not had issues of age limit and limited terms of  office of the leaders,” said Marube.

The Executive Director acknowledged that the policy inclusion on non-remittance of employees’ savings by employers is one  of the challenges that the cooperative movement is grappling with.

“The biggest challenges in the cooperative is that there is more than Sh. 2 billion of members’ money that has not been  remitted in the Saccos and we feel that this policy should be clear on the penalties for those employers who do not remit money. We are of the opinion that the officers in charge and owners should be held liable and some of them even put in  cells right away,” Marube said.

He said that after the deliberations they hoped that in the next one month after giving out the views and if accepted by  the three bodies namely national, CoG and Cooperative, the policy will be tabled at Cabinet as a sessional paper, then  forwarded to parliament and once approved they will be left with only the review of legislations that go with it before  it becomes a legal and binding document.

The  Kenya Union of Savings & Credit Co-operatives Ltd (KUSCO) Managing Director, George Ototo termed the issue of age limit proposal a  theoretical perspective which cannot hold as it does not dilute governance principles.

During the forum, Acting Commissioner for Cooperatives, Didacus Ityeng said societies can allow venture capitalists and  thus be able to build up their finance based as part of enhancing funding.

This, he added needs not be legislated but based on an agreement between the investors and the society members.

The  Ag. Commissioner said out of the four chapters in the policy, chapter three which touches on the issue of governance had the most concerns.

“We had three concerns in the governance area and one was how to deal with the issue of succession in the

movement”, he said and added that “there was a proposal on some form of limitation of the tenure of office bearers to more than two terms of five years and this has been left open to be decided by respective members of the cooperative movement.”

Apart from the venture capitalists proposal, succession and age limit being contentious issues included in the draft

cooperative policy, others are audit of the cooperative societies.

Ityeng  said  audit  of  societies  will  continue to be done by the national government based on its endowed expertise and  more so because counties do not have capacities to undertake the same.

The draft policy document was informed out of good consultations from various agencies it was published on the website and members of the public were asked to critic.

Comments and views, according to the commissioner are still being accepted until Wednesday 8th.

By  Wangari  Ndirangu

Leave a Reply