As Kenyans celebrate International Co-operatives Day, it is the perfect opportunity to examine the economic outlook of the Sacco industry, the achievements made so far, missed opportunities, and what policymakers can do to revitalize the trillion-shilling industry.
The United Nations’ (UN) International Day of Co-operatives is observed on the first Saturday of July each year. Some of the day’s goals include increasing awareness about the role of co-operative societies, as well as strengthening and extending partnerships between the international co-operative movement and other supporting organizations, including governments.
The International Day of Co-operatives, known locally as Ushirika Day, highlights what co-operatives do to improve the world’s economic and social development, especially for those in the low-income bracket who are often excluded from formal financial institutions such as commercial banks, mortgage firms, and microfinance institutions.
Co-operative societies worldwide have celebrated the International Day of Co-operatives as a global event since 1927. Based on the principle of cooperation, co-operatives help create new ethics and values in business and economics and play a pivotal role in the world’s economic and social development.
In 1994, the United Nations recognized and reaffirmed that cooperatives are vital for the world’s economic, social, and cultural development. However, two years earlier—on December 16, 1992—the UN General Assembly proclaimed the first Saturday of July 1995 as the International Day of Cooperatives, marking the centenary of ICA’s establishment.
The year 2024 presents a significant opportunity for Kenya to overhaul its outdated Co-op Act Cap 490, which has not been updated despite the unveiling of a new constitution that listed co-operatives as one of the devolved functions under County Governments.
The Co-operatives Bill 2024 is currently undergoing public participation before it is brought back to Parliament and Senate for debate. Industry observers maintain that with the determination of the former CS for Co-operatives and Micro, Small and Medium-Sized Enterprises, Hon. Simon Chelugui, the Bill should finally see the light of day.
When the Kenya Kwanza Government came into office in August 2023, the Co-operatives sector was lifted from a mere state department into a fully-fledged ministry, a move that received accolades from industry players.
Despite Kenya’s sluggish economy for the better part of 2023, top executives and directors of some of the leading Deposit-Taking Saccos are optimistic and looking forward to better fortunes in 2024.
Radical reforms have taken place at the Kenya Union of Savings and Credit Co-operative Organization (KUSCCO), and they are yet to reach their conclusion. Measures taken at the Union are positive for the industry, ensuring members’ hard-earned life savings are safe.
Meanwhile, the underfunded Sacco Societies Regulatory Authority (SASRA) appears overwhelmed and has resorted to firefighting, as seen in the case involving Metropolitan National Sacco.
The Government has pledged pumping cash, including the Hustler Fund, through Saccos, and involving housing co-operatives in the affordable housing program.
Although the political scene remains calm, the damage caused by heavy rains, including the destruction of food and infrastructure, could have an impact on business, thus affecting co-operatives, especially those that support farmers.
The Co-operatives industry remains worried about increased incidences of cybercrime, as well as theft by staff and insiders in an increasing number of co-operative societies. It is hoped that the eagerly awaited review of the Co-operatives Act- Cap 490 will address governance issues that continue to affect the co-operatives industry.
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