Finer details of the Cooperative Bill 2021
The Cooperative (Amendment) Bill 2021, which has undergone validation by stakeholders and is now waiting for consideration by both the Senate and Parliament, before being presented to the President for Assent, is a precursor to repeal of the outdated Co-op Act Cap 490.
If passed into law, the Bill intends to repeal certain sections of the old Act, to bring it into compliance with the new constitution that has slotted management of co-operative societies as a devolved function.
The Bill has a total of 16 clauses which provide as follows—
Part I of the Bill deals with Interpretation, Objects, and Purpose of the Act and Guiding Principles of co-operatives.
Part II Contains Details on the Establishment of the Offices and Administration of the Act. The Offices and those at the National Government i.e. appointment of the Office of Commissioner; County Director of C0operatives, their respective functions, and duties such as filing of Annual Reports. Section C of this clause deals with the establishment of an Inter-Governmental Co-operatives relations technical forum, its functions, and meetings.
Part III of the Bill spells out the Structure of Cooperatives in Kenya, registration to the Apex Co-operative, its roles, and functions as prescribed by the Cabinet Secretary.
Part IV outlines the procedure for Registration of Cooperatives, restrictions of societies within the same common bind, amendment of by-laws, protection, and restriction on the use of the name SACCO.
Part V of the Bill outlines qualifications of members of co-operative societies, limitation on share capital, voting rights, transfer of shares, rights to members, and their obligations.
Part VI dwells on duties of cooperatives including their Registered Address, by-laws, Estimates of Income and Expenditure and well as Accounts and Audit as well as production of books and other documents
PART VII of the Bill covers Governance of cooperatives such as general meetings, special AGMs, who presides over these meetings, and how the meetings should be held physically, virtually, or a hybrid of both; membership and powers of the board, supervisory board, and their duties and Nomination committee.
Part VIII covers issues of Amalgamation and Division of Cooperativeswhile Part IX is on Rights and Obligations of cooperatives such as rights of members giving the notice to withdraw from the society as well as the liability of past members.
In Part X, the Bill mentions how cooperatives should invest their funds, give out loans, borrow, invest in non-core activities, declare and pay bonuses, maintain a reserve fund and distribute the net balance to members as Part XI defines how a charge can be placed on the cooperative property and how it should be registered with the Commissioner and keeping a registry of charges.
In addition, the Bill deals with Inquiry, Inspection, and Surcharges in Part 12 and Part 13 outlines special powers of the yet to be established cooperative courts and the process of liquidating a society whose registration has been cancelled
How settlement of disputes through a cooperative tribunal or cooperative courts should be done is in Part 14 of the Bill. Part 15 contains general rules on cooperative self-regulation, credit information sharing, inter-cooperative lending, cooperative share trading, and capital raising as well as the remuneration of officers and members of cooperatives; setting up of a co-operative development fund. Part 16 covers transitional arrangements touching the Office of Commissioner for Cooperatives, County Director of Co-operatives, and Members of the C0operative Tribunal.
SASRA will also be required to submit its statement of income, expenditure, assets, and liabilities to the Auditor-General and not the Controller of Budget in line with the Constitution. The amendment also seeks to make reference to the correct citation of the Public Audit Act.
The proposed law requires an application made by a SACCO intending to transact the deposit-taking business to be accompanied by evidence that the SACCO Society meets the minimum capital requirements prescribed in regulations.
The principal object of the Bill is to amend the Sacco Societies Act No. 14 of 2008 by providing for the usage of ICT in collecting and receiving statutory reports. This is aimed at reducing the regulatory reporting burden on SACCOs and ensuring a faster, efficient, and accurate reporting, monitoring, and analysis of Sacco’s financial status at any time, being the cornerstone of Risk-Based Supervision (RBS).
The Bill also seeks to realign the definition and roles of Minister to Cabinet Secretary and also the responsibility and office of the Controller of Budget as reflected in the Act, to be in line with the Constitution.
This Bill has been republished following the Court of Appeal judgment in Civil Appeal No. E084 of 2021, which nullified the Sacco Societies (Amendment) Bill, No. 16 of 2018 for want of participation by the Senate.
The Bill, as passed by the National Assembly, has therefore been republished in compliance with the judgment of the Court of Appeal to allow for consideration by both Houses in terms of Article 109(4) of the Constitution.
