The Cooperative movement SACCOs has been challenged to tap into all sectors of the economy to promote entrepreneurship activities among the Small and Medium Enterprises (SMEs)
Speaking during a Cooperative Alliance of Kenya (CAK) national supervisory and audit committee workshop in Tsavo, Director Cooperatives banking division at the cooperative Bank Vincent Marangu said it was critical for the SACCOs to widen their scope now that the country gradually opening up for business after the Covid 19 pandemic push the economy to the precipice.
He urged the SACCOs to take advantage of the relief the government offered in the 2021/22 fiscal budgetary allocations to widen their net sectors that were traditionally not fully exploited especially those in the agricultural and infrastructure sectors.
“Looking at what the government has done in the budget such as increasing allocation in agriculture sector and also housing, cooperatives can tap and benefit from this “, he said.
He singled out the coffee, tea and even dairy sectors which had potentials to reap great benefits saying the stabilization of the dollar will assist the cooperatives to tap into that.
“This meeting comes at a time when the economy is on recovery mode, the global market is opening up and there is optimism that international trade may resume fully”, he said
Marangu further noted the outlook was very promising for the cooperatives societies in housing after the government pumped additional funds to facilitate provision of affordable housing adding that the current budget emphasized on bridging the deficit gap in from previous allocation.
“We are going to see a lot of demand by government on internal borrowing but it will not be good for private financial institutions especially those with surplus idle liquidity who can benefit from other types of investment due to the increase for appetite for funding.
He expressed optimism that cooperatives will remain as resilient just like in 2008/09 global financial crisis where they demonstrated stability against the storm
“Under the Covid-19 pandemic, this cooperatives has withstood and we expect them to offer lending carefully to be able to recover the loans and the future looks very promising for those who play their cards well”, the Director said .
Deputy Director Reports and Data management at the Ethics and Anti-Corruption Commission (EACC) Susan Kinyeki on her part said the commission would partner with CAK to address and thaw out some of the malpractices detected in the sector..
“We have gotten reports on malpractices, some are under investigations while others we have referred them to multi- agencies”, she said.
Kinyeki explained that for the last 5 years the commission has received over 300 reports on malpractices and that currently over 50 of them are under investigations.
“We are advising the cooperatives to identify risk areas in their SACCOs and mitigate them. We are better off doing corruption more than investigations and we ask them to put risk mechanism in place.
Daniel Marube, the Executive Director and CEO of CAK said the supervisory and audit meeting today is to ensure proper financial management in the cooperative societies.
He noted that the audit committee members play a key role as oversite role on behalf of members to see and check on how the management and staff are running the affairs of their cooperatives
“In order to maintain their role and confidence and faith in financial sector, we need to strengthen and equip the supervisory members on how they can execute their mandate in strengthening the good governance so that we do not have ethical and audit issues in our SACCOs”, he said .
Marube noted that during the meeting the main key areas the supervisory and auditors need to look at in order to minimize the risk is in areas of ICT, Cyber security or even how to detect fraud.
“Supervisory members working and providing services to cooperative societies should be able to be equipped with the necessary tools to become good auditors and good financial managers in order to safeguard the resources of our members”, the CEO said
The three day meeting is running under the theme “ the role of the supervisory committee members in the cooperative in bringing transformation and good governance and prudential financial management, in cooperative societies”.
By Wangari Ndirangu