Cooperatives Bill step in the right direction
Nation Sacco members follow proceedings during the 48th Annual General Meeting at St. Andrews PCEA Church on February 17, 2024.
The Cooperatives Bill, 2024 is a big step towards reforming the country's cooperative sector, including Savings and Credit Cooperatives (Saccos). This transformative legislation aims to overhaul the existing regulatory framework, promoting good governance, enhancing member protection, and eliminating fraudulent entities posing as Saccos.
By introducing this comprehensive bill, the government has demonstrated its commitment to strengthening the cooperative movement, safeguarding members' interests, and ensuring the sector's integrity.
The Sacco sector has long been a cornerstone of Kenya's economic and social fabric, providing essential financial services to millions of Kenyans. However, the sector has faced numerous challenges, including inadequate regulation and poor governance.
A particularly noteworthy provision of the Cooperatives Bill, 2024 is its efforts to curb fraud. Clauses 41, 43, and 44 prohibit the use of the word "cooperative" or any of its derivatives by entities that are not duly registered under the Act.
By clearly defining what constitutes a cooperative and enforcing strict registration requirements, the Bill seeks to safeguard the integrity of the cooperative movement. Another notable aspect of the Bill is its provision of a four-tier cooperative structure; primary cooperatives, secondary cooperatives, cooperative federations, and apex cooperatives. This structure aims to streamline cooperatives and ensure more effective governance and oversight.
Furthermore, the Bill establishes the office of the Commissioner for Cooperative Development at the national level and the office of the County Director for Cooperatives in each of the 47 county governments. These offices will be crucial in overseeing the registration and supervision of cooperatives, ensuring that they adhere to the highest standards of governance and financial management.
The emphasis on member protection is another key feature of the Cooperatives Bill, 2024. The Bill prioritises the security of member savings through stricter financial controls and robust oversight mechanisms.
The establishment of the Inter-Governmental Cooperatives Relations Technical Forum is another significant feature of the Bill. This biannual forum will foster cooperation and coordination between sector stakeholders and the government. .
At the forefront of this progress stands the Kenya Union of Savings and Credit Cooperatives (Kuscco). As the apex body for Saccos in Kenya, Kuscco champions progressive legislation. While certain provisions of the Bill may pose challenges for certain sectors, it is imperative that the implementation process is inclusive and responsive to the diverse needs of the cooperative movement. As we move forward, it will be crucial to maintain an open and inclusive dialogue to address any concerns and ensure that the implementation process is fair and effective for all.
The writer is the Group Managing Director, Kuscco Ltd
