Leveraging on the cooperative movement for growth and sustenance

In 2021, World Council estimated that Kenya had more than 9,000 active financial cooperatives with an asset base of Ksh1.2 trillion and members’ savings and deposits above Ksh900 billion. With slightly over 12 million members, cooperative societies have become a huge channel for savings and investments in the country. Whether it is agriculture-based, housing, or Sacco, cooperative societies allow members with shared interests to access resources that boost their economic growth.

Providing exposure to cooperative member needs and opportunities, these societies have a unique strength: they are best positioned to develop and implement relevant, practical solutions centered on the needs of their institutions and the members.

In this regard, when cooperative societies leverage other cooperatives to further their economic, technical, and industrial growth, they increase their chances of long-term growth.

One of the ways they can do this is by utilizing financial and capacity-building tools from other well-established and credible cooperatives.

Financial Tools

Cooperatives are often a channel for loans for a significant number of their members. While many cooperatives utilize member deposits to facilitate lending, they can further enhance their lending pool by creating a more robust capital position.

Through investments and risk mitigation tools, cooperatives position themselves to meet their members’ needs with reduced financial risk or exposure. Achieved through investment and insurance solutions, finding the right fit for their needs is critical. For cooperatives seeking to expand their loan and investment portfolio, all while maintaining the cooperative spirit, financial institutions with a cooperative foundation are likely to be the best partner. 

CIC Insurance Group, which started as a department of Kenya National Federation of Cooperatives in 1968, is a good example. Evolving since then to become a leading cooperative enterprise and micro-insurer in Africa, CIC embodies the cooperative spirit, and this is demonstrated through its cooperative-specific solutions. Providing customized insurance and asset management solutions, it has consistently designed products that speak to the cooperative movement’s needs and challenges.

One example is CoopCare, an exclusive medical product for cooperatives and their members. Modelled after member needs for affordable, accessible, and family-friendly solutions, CIC developed a group cover on fairly priced group terms that would enhance member access to quality healthcare with reduced financial exposure. This not only enhances the well-being of cooperative members but also speaks to the cooperative mission, which is to enhance the socioeconomic position of its members. As such, a cooperative that chooses to take up CoopCare for its members will not only be accomplishing its mandate to build financial inclusion but will also be enhancing the growth of the cooperative movement. 

Capacity Building

Dealing with a diverse group of members and industries, cooperatives are often in need of continuous skills development and access to knowledge. On the upside, the wide pool of members also means it has access to extensive knowledge and skills. 

Cooperatives can leverage the technical capacity and expertise of other cooperatives and take up training, consulting, or capacity-building programs that deepen their knowledge and ensure sustenance. This, again, is best delivered by institutions that have a deep understanding of cooperatives. 

CIC Group, for instance, has a dedicated training segment under the Co-operatives Division. The segment adds value to clients by training on areas that affect the Cooperative movement. Incorporating topics such as credit and debt management, investment best practices, and digital transformation, these trainings offer an opportunity for cooperatives nationwide to gain access to in-depth knowledge and develop expertise, which helps them handle challenges and take advantage of opportunities.

Drawing from their own experience in serving cooperatives, CIC is able to deliver relevant and timely training programs to other cooperatives. Consequently, this saves time and costs for the societies, as they receive quality services at a minimal cost. 

Kenya’s Sacco sub-sector is among the biggest in Africa, with a 5.7 percent of total assets to GDP ratio, according to the Central Bank of Kenya. Providing access to credit as well as savings, Saccos continue to drive economic productivity across different sectors, affirming their critical role in the economy. However, to deepen growth and sustenance, cooperative societies need to leverage on customized tools and solutions, which are best developed and administered by other cooperatives.

Whether seeking investment, insurance, or capacity-building solutions, cooperative societies’ best partner is other cooperatives. This collaboration not only strengthens the cooperative movement, but it will also help drive financial inclusion among members.

The writer is the GM of Cooperatives at CIC Group