With the Ministry of Agriculture, Livestock, Fisheries, and Co-operatives yet to formally present a new draft policy paper, which will usher in a fresh beginning for co-operatives, confusion still reigns supreme in this sector.
More than a year since a draft National Co-operative Development Policy Paper was published, this document is yet to reach the cabinet for approval and parliament for debate.
Top leaders in the co-operatives movement, including powerful lobby groups such as the Kenya Union of Savings and Credit Cooperatives (KUSCCO) and Co-operative Alliance of Kenya (CAK), have constantly thrown barbs at key proposals in the draft policy paper, now gathering dust at the State Department for Co-operatives.
There have been loud protests over a proposal to introduce term limits for directors sitting on the Boards of Co-operative Societies.
The now outdated Co-operative Societies Act, Cap 490, does not specify how long a director can sit on the Board of a Co-operative Society. This situation has seen influential directors serve for life in most of these boards.
While the draft policy paper has proposed that a director can only serve for a maximum of two terms of five years each, this provision has drawn protests from sections of the co-operatives fraternity.
The argument has been that co-operatives are member-controlled, and elections are held each year when 1/3 of the board retires and faces an election at the Annual General Meeting (AGM).
Leaders are also opposed to reviewing and eliminating multi-layer leadership structures where one is a director in a primary co-operative society and holding a similar position in a National Co-operative Organizations (NACOs).
It has taken the Sacco Societies Regulatory Authority (SASRA) intervention for Saccos to amend their bylaws, allowing for setting up vetting committees to clear individuals aspiring to leadership positions.
While there are cases of directors who serve for long because they deliver to members, there are also those, especially the ones leading rural-based Saccos, who retire without leaving any succession plans. Others run these societies like their personal fiefdoms with a complete iron fist.
Directors of these Saccos should allow for their activities to be limited and scrutinized. This is because they take deposits from the public.
The State has a responsibility to protect the public from corrupt co-operative officials.
Perhaps the reason why co-operative societies remain lag behind in the financial services sector is because of their unsatisfactory governance structures, including a lack of safeguards to protect members’ funds.
Since 2013, when the devolved system was implemented, challenges have emerged in the management and supervision of the co-operatives that call for closer cooperation between the national and the county governments. This cooperation has been difficult to achieve in the existing legal and regulatory framework currently in operation.
The new rules coming into force in June 2021 that will allow SASRA also to regulate the big BOSA Saccos is a step in the right direction.
