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Cooperatives in Kenya

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  • December 2011
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Co-operatives are user-owned, user-controlled and user-benefited organisations. They could be agricultural, non-agricultural, unions, or Savings and Credit co-operatives. They operate in different sectors of the economy including, agricultural, handicraft, Jua kali, transport, housing development, building and construction, banking and many other such spheres of the economy. Clearly, the cooperative movement has had its tentacles in every possible sector of the Kenyan business world.

These co-operatives, and more strongly established, the agricultural cooperatives , play a major role in production, especially in the marketing bit. However, the broad objective of the co-operative concept is to promote the economic interests and general welfare of members in accordance with co-operative principles, and thus, pivotal in economic growth and alleviation of poverty.

The policy objective of the Kenyan co-operative movement is to spur sustainable economic growth by focusing on achievement of desired outcomes through strengthening of the movement, improving operation extension service delivery, corporate governance, access to markets and marketing efficiency (International Monetory Fund 2007). The co-operatives have an immense potential to deliver goods and services in areas where both the public and the private sector have not ventured into. In most cases, co-operatives are local institutions that address local needs, employ local talent and are lead by local leaders, either directly or through branches.

The co-operatives in Kenya are organized into service and producer co-operatives. The producer co-operatives’ objectives are to promote the use of modern technology and contribute to national development through production. The service co-operatives are responsible for procurement, marketing and expansion services, loan disbursement, sale of consumer goods and member education.

The co-operatives have made remarkable progress in agriculture, banking,...