When the first case of Covid-19 infection was reported in Kenya in March 2021, most Deposit-taking Savings and Credit Co-operative Societies (SACCOs) began moving their products and services online to reach out to members who could not access the banking halls. This was a reaction to a lockdown and restriction on movement and gathering as a health measure to contain the spread of the pandemic.
According to findings by the International Co-operative Research Group(ICRG), government restrictions imposed on mobility during Covid-19 caused the greatest challenges among co-operatives, significantly impacting when, where and how members could meet as well as the transportation of members and products.
ICRG, the research arm of the US Overseas Co-operative Development Council (OCDC), sought to understand whether and how Covid-19 impacted co-operatives in five sub-Saharan countries, including Uganda, Malawi, Madagascar, Rwanda, and Kenya, in terms of business resilience.
This research intended to identify, to the extent possible, patterns in practice and policy that may be indicative of co-operative business resilience and to describe the strategies employed by co-operatives to deal with the challenges faced.
In the case of Kenya, while lockdowns were imposed due to health concerns, most co-operatives switched to virtual meetings during the pandemic, suspended or decreased member dues and fees, and restructured loans or reduced interest on loans. Almost all co-operatives transitioned to providing some or all member services virtually.
ICRG found that despite difficulties faced during Covid-19, all of the co-operatives in Kenya, Uganda, Malawi, Madagascar and Rwanda remained in business. They drew on the strengths of the co-operative model and continued operations in the face of hardship.
The research reported several strengths and strategies in all five countries covered. The most frequently reported strength overall was the ability to innovate (41%) new ways to handle challenges through changes made in operations, policies, training, and the adoption of new technology to provide services.
For instance, some dairy co-operatives began making yoghurt, cheese and powdered milk with the milk that could not be sold due to curfews and transportation issues instead of letting it go to waste and taking a loss. Other co-operatives relied heavily on diversifying their products and found that it helped maintain revenue.
Adopting new technology for providing services helped sustain operations, including the Money Mobile Apps such as Mpesa, and Airtel Money, which allowed members to continue uninterrupted transactions.
Co-operatives also used Apps such as Zoom and similar applications, such as Microsoft Teams and WhatsApp, for conducting meetings as these societies sought new and innovative ways of operating in the pandemic environment with limited financial resources.
The next most commonly reported strength was the commitment and trust of members across all co-operatives, a heartening reflection on the unique structure and culture of co-operatives that sets them apart from a “business as usual” model. In focus group discussions, leaders gave testimony of members’ loyalty, opting not to withdraw membership.
ICRG findings also showed that even those co-operatives whose business performance declined during the Covid-19 pandemic managed to stay in operation. Not only did they remain open, but they were able to offer important services to their members during a time of great difficulty.
These achievements are testaments to the fortitude and value of the co-operative model during times of widespread external hardship.
The fact that those who experienced declines in business performance were those who offered the most services provides an interesting point of query regarding the balance between co-operative service provision and business viability.
This research utilized mixed methods to understand whether and how Covid-19 has impacted co-operatives in five sub-Saharan countries, including Uganda, Malawi, Madagascar, Rwanda, and Kenya, in terms of business resilience.
The research intended to identify, to the extent possible, patterns in practice and policy that may be indicative of co-operative business resilience and to describe the strategies employed by co-operatives to deal with the challenges faced.
During the Covid-19 Crisis, the Co-operative Alliance of Kenya (CAK), a powerful lobby group representing the interests of the co-operative movement, appealed to DT Saccos to suspend interest rates charged on existing loans. This appeal had the effect of cushioning members from the economic meltdown that arose from the pandemic.
CAK Chief Executive Officer Daniel Marube urged societies to waive interest rates charged on Sacco loans as part of their contribution to the fight to lower the effects of the virus on the industry.
Following containment measures set out by Kenya’s Ministry of Health, the then Ministry of Co-operatives, Industry and Trade allowed co-operatives to pay dividends and rebates to members without requiring members to approve such declarations during an Annual General Meeting (AGM). The State Department for Co-operatives announced an indefinite postponement of AGMs.
