Power to People or Delegates. The Catch-22 as SACCO Members Defy Directive on Delegates System
As the annual meetings for SACCOs get underway, attention has shifted to how large cooperatives that have not yet switched to a delegates system will handle the matter when it is brought to the floor.
Members of various teacher based Saccos are among those who have already bitterly opposed the transition. They view the system as a rushed decision imposed on the societies without proper public ––participation.
A directive from the Ministry of Cooperatives issued to societies with more than 5,000 members requires them to switch from the traditional Annual General Meeting (AGM) system to a delegates system.
“Compliance with this new directive is key. Thus, we must approach this transition thoughtfully and positively. Your voices will shape how we respond to this directive,” said Mr. Eliud Mbugua, Mentor SACCO Board Chairman, while addressing members at the recently concluded 49th AGM.
SACCO members opposed to the change feel the delegates system is prone to manipulation. They argue that limiting decision-making to elected representatives could deny ordinary members a direct voice and make it easier for directors to influence results. Some members rejected the push to adopt the system, citing past failures in other societies that have taken this route.
“The delegates system is immoral. We cannot accept it,” one agitated member said.
Mr. Peter Ngugi, Tower SACCO Board Chairman, said the Society has requested additional time to implement the change. “Additional time is required to sensitize members, conduct consultations, amend bylaws, and obtain statutory approvals to ensure that the transition is lawful, inclusive, and in the best interest of the membership,” he added.
However, some leaders argue the shift is necessary for efficiency. “The delegates system, which is further divided into specific committees, is less noisy and easier to manage. Complex policy matters are then discussed faster by the delegates, who then pass the resolutions to members. It is a nightmare to handle a crowd of more than 5,000, each demanding to be heard. The delegates system enables the meeting to focus on issues that cannot be handled by the executive staff,” said Evelyn Moraa, Chief Executive Officer, Sotico SACCO.
Under the current AGM system, it is not unusual for members to spend significant time raising issues such as whether to queue for lunch or receive packed food, or debating allowances for those who traveled from afar.
Several SACCOs, including Winas and Univision, have already transitioned. According to the Kenya Teachers Sacco Association (KETSA) Chairman, Mr. Robert Njue—who also serves as the Board Chairman for Winas SACCO—the delegates system is the best governance structure available.
“At Winas SACCO, we have just transitioned to the delegates system. We are still sensitizing our members on why this structure is the best based on the benchmarks we have done. All over the world, cooperatives are embracing this system,” he said.
Solomon Atsiaya, Chief Executive Officer, the Kenya National Police Deposit-Taking SACCO, agreed, noting that the system is more cost-effective. “Fewer people at general meetings reduces venue, travel, and administrative expenses and speeds up decision-making. As a SACCO grows, a delegates system keeps governance workable and prevents decision-making from becoming unwieldy.”
He added that a delegates system ensures decisions reflect the wider membership and allows for higher-quality deliberations compared to a large, unstructured meeting. Delegates can convene and act on urgent matters more quickly than a full general meeting. Furthermore, a smaller group is better at negotiating compromises and building consensus. Delegates also provide a clear two-way channel for information to flow between management and ordinary members. Training delegates is also easier and more effective than attempting to train the entire membership; since delegates have defined roles, they can be held accountable for their activities.
As SACCOs await the new Cooperatives Bill, currently moving through Parliament and the Senate, the delegates system and term limits for directors are expected to be prominent issues.
The Cooperatives Bill 2024 introduces a mandatory delegates system for large cooperatives with over 10,000 members. These cooperatives must have between 150 and 500 delegates. The Bill stipulates that selected delegates should reflect the cooperative’s geographic distribution, gender balance, and age diversity, and include individuals with disabilities.
According to the Bill, directors will serve for a maximum of three years with the possibility of one renewal. This aims to address mismanagement and financial losses attributed to long-serving directors, some of whom lack the necessary qualifications. Cases have been frequent where directors were elected to tea or coffee farmer cooperatives based on the number of trees they owned—and thus their financial muscle—rather than their technical competence or leadership qualities.
