Cooperatives in Kenya

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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, credit, agro-processing, storage, marketing, dairy and housing. Service co-operatives are the closest to communities and are organized on a shareholder basis, formed by individual members of organizations voluntarily working in a specific geographical area. For instance, primary level sugarcane farmers co-operatives provide a collection point for ,the farmers’ prooduce and even negotiate the per ton cost of sugarcane.

Considering the substantial benefits that the cooperative movement has to our economy, and considering its significance to the livelihood of many, the Government recognizes the need for urgently improving management structures and accountability of co-operatives, so as to create a sustainable environment for their existence and operations.

Just some few numerical facts to back my case as to influence of co-operatives to the society: -The cooperative is almost 103 years old, having started with the Dairy Societies in 1908. -In Kenya, we have about 12,000 registered co-operatives out of which 5000 are SACCO’s (Savings and Credit Co-operatives). -The Co-operative movement in Kenya has a membership of over 7 million individuals, making it the largest in Africa. It impacts directly and indirectly on 70% of Kenya’s population. -SACCOS themselves have mobilized over 150 Billion Kshs in savings, more than 30% of the National Domestic Savings. -There is an entire Ministry, Ministry of Co-operative Development that provides enabling policy, legal and institutional framework.

The co-operative movement in Kenya is organized into a system comprising of primary and secondary societies. The structure coalesces into a four tier structure of primary co-operatives, Unions, National co-operative Organizations (NACOs) and one Apex body, the Co-operative Alliance of Kenya (CAC). At each level, different functions can be performed. While the structure is stable, the performance and linkages within the various levels is weak, but there is room and potential for...
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