The Kenya Cooperative movement, though leading in Africa and being among the top five in the world in terms of membership and deposits, is yet to deepen its presence in other sectors of the economy.
CIC Insurance Group Chairman Nelson Kuria, however, says that the cooperative societies in the country have made strong strides, mainly in financial deepening, especially in serving customers outside the mainstream financial ecosystem.
“Our cooperative movement is thriving well on the continent and globally. Recently controlling more than Sh1 trillion worth of assets and very healthy loan books in addition to controlling more than 30 per cent of the national savings,” he said.
Kuria, who was giving a talk to cooperative leaders on ‘making cooperatives work’ during a Cooperative Alliance of Kenya (CAK) forum on the Ethical Leadership and Governance Forum for Savings and Credit Cooperatives (SACCOs), noted that the movement has also succeeded in the development of human capital as well as creating rural wealth.
“All this can be attributed to the vision initiated by the pioneer fathers and maintenance of the same by the succeeding leaders, but despite SACCOs thriving in enhancing financial deepening for income earners, competition in the market segment has been increasing as commercial banks have equally developed products targeting the small earners.
Kuria noted that it is time that cooperative societies in the country diversify their areas of interest in the economy in order to strengthen their resilience to endure the cutthroat competition in the global market.
“Our SACCOs are doing better than some commercial banks in terms of deposits and membership and our success as a cooperative movement has attracted other countries on the continent to come for benchmarking and the country has equally exported human resources to other African countries to help in initiating cooperative movements,” he noted.
However, Kuria argued that the cooperative societies are yet to deepen their presence in various sectors of the economy, for example, hospitality, health, education, mining, wholesale and retail, and industrial economic zones.
“These are areas that, even though the societies have invested in, are yet to deepen their potential in order to be more competitive in the global market. One strategy to help in exploiting the untapped areas is through business integration and innovation. This will help in consolidating and increasing resources within the cooperative ecosystem,“he added.
Business integration, if well managed, can produce impressive results and thus serve as a case study to other trade players yearning to incorporate their businesses. Kuria acknowledged this, noting that some institutions in the past tried to incorporate their business units but failed due to corruption, leadership wrangles, conflicts of interest, and lack of innovation and foresight.
“Integration is a key component to stimulate high business growth. But it is not easy to achieve, as the same requires sound management, a high level of innovation, and visionary leadership,” said Kuria and urged the cooperative leadership to shift from a self-mentality to a broad-based approach encompassing current business realities.
Cooperative Alliance of Kenya (CAK) Chairman McCloud Malonza confirmed that the movement, in conjunction with the government, is fast-tracking capacity building of leaders to equip them with the necessary skills to survive in the current business environment.
He added that the cooperative movement has grown over time despite some challenges and also competition from big corporations.
He specifically mentioned governance issues, which he termed unfortunate, and named the ongoing legal and financial issues surrounding the Kenya Union of Savings and Credit Co-operatives (KUSCCO).
“There is no sector that is 100 per cent; but we want to be there, and that is why we are reinforcing the issue of governance and values in leadership, which should be about change and transformation for the people we are leading, and that is why we are in this meeting,” he reiterated.
Malonza said the cooperative bill, which is currently at the Senate level, once passed, will ensure addressing long-standing governance and management challenges bedevilling the movement.
“Going forward, our mission is to strengthen the institutions and help our cooperative organisations to cope with the changing global business dynamics,” Malonza said.
Thomas Gachie, CEO of CoopTech, a cooperative-owned technology company that supports and provides shared services to the cooperative movement in Kenya, told the 56 leaders representing the movement to incorporate technology in their services.
“When we build the ecosystem using CoopTech, it means that we are going to reach the members from their homes, where they can access cooperative services, transact on their phones without having to go to apply for a loan from the cooperative branches, access credit facilities, or even make transactions from anywhere within the Country.
Gachie noted that the sum total of technologies that have been put in place by individual SACCOs runs in the tens of billions of shillings, but now, through the creation of a shared capability, money spent on technology within the movement will reduce.
“CoopTech will be able to accelerate uniform technology adoption and information sharing, which will inadvertently result in lower fees for its members through economies of scale on transaction volumes,” he said.
Gachie further said that the utilisation of the shared platform will strengthen industry risk management, sound commercial agreements, and secure transactions and bring convenience to customers.
By Wangari Ndirangu
