The government issued a circular in June last year directing large Savings and Credit Co-operative Societies (SACCOs) to transition from Annual General Meetings (AGM) to Annual Delegates Meetings (ADM), effectively ending the era of massive stadium gatherings. Supported by the Cooperative Alliance of Kenya for its focus on efficiency and strategic decision-making, this shift faces pushback from a section of members and leaders who fear a loss of direct influence and a dilution of oversight.
The Conflict: Efficiency vs Democracy
While regulators and SACCO leaders argue that this move is essential for operational modernization, many members view it as a threat to transparency. The primary concern is that moving away from direct AGMs restricts the voice of the individual member. Ordinary savers fear being sidelined from the decision-making process and losing their direct say in how their society is governed.
Their concerns include:
- Integrity of Governance:Members fear that a small group of delegates could be more easily manipulated, bribed, or “pocketed” by boards of directors to serve selfish interests rather than the wider membership.
- Direct Accountability:Many feel they will lose the ability to question directors face-to-face and receive first-hand answers regarding financial performance, dividends, and internal issues.
- The Cooperative Spirit:Some critics view the directive as a government-imposed change that destroys the “heartbeat of cooperative democracy.”
The Proponents Argument
On the other hand, proponents argue the shift is necessary for Tier I and II SACCOs. For institutions of this scale, holding an in-person AGM for every member is increasingly seen as logistically impossible and financially risky.
They contend that:
- Quality of Decisions:A smaller, more informed group of delegates can better grasp complex financial reports, leading to more strategic and professional decision-making.
- Orderly Governance:The delegate system is expected to reduce “mob rule” at AGMs, ensuring meetings are organized and productive.
- Representation:Delegates can provide more tailored representation by being elected from specific, smaller geographic branches.
However, even at the institutional level, there is friction. The Council of Governors has opposed the directive, arguing that it violates the principle of devolution and suggesting the national government is overstepping its mandate.
Emerging Concerns
- Transparency of Elections:Members are worried about whether delegate selection will be truly democratic or if current management will “rig” the process to ensure their own re-election.
- The Virtual Alternative:Rather than moving to a delegate system, some members advocate for keeping the AGM format but transitioning to virtual or hybrid models to maintain wide participation with modern efficiency.
The Regulatory Mandate
Cabinet Secretary for Cooperatives and MSMEs Development, Wycliffe Oparanya, directed all cooperatives with over 10,000 members to transition to the delegate system last year. The rationale is that direct democracy in billion-shilling institutions has become a liability.
“The law—specifically Section 27(1) of the Cooperative Societies Act—vests the supreme authority of a cooperative society in the general meeting,” Oparanya noted. “However, it is neither practical nor efficient to hold general meetings with every member present in cooperatives that have more than 10,000 members. This has often resulted in disorganized meetings and poor decision-making.”
The directive gave societies a nine-month window to amend their bylaws and capped representation at a maximum of 500 delegates. To ensure fairness, the Ministry mandated that these 500 delegates must reflect geographical distribution, gender balance, and the inclusion of persons with disabilities.
SACCO AGMs and the Power of the Member
The Annual General Meeting (AGM) has long been one of the most important democratic platforms for ordinary citizens. As the highest decision-making body of a society, it is where members come together to shape the direction, accountability, and future of their institution.
At the heart of every SACCO is the member. Unlike traditional financial institutions where customers have little influence over governance, SACCO members are both owners and beneficiaries. The AGM is the space where this ownership is exercised in full, serving as a vital platform for both engagement and education.
