USaid to inject Sh2.9bn in Kenyan cooperatives
America has announced five major investments totaling Sh2.9 billion ($19.7 million) in Kenya’s cooperatives over the next five years.
America has announced five major investments totaling Sh2.9 billion ($19.7 million) in Kenya’s cooperatives over the next five years targeting to benefit about 500,000 members via loans and capacity building.
The funding, which will be provided by the United States Agency for International Development (USaid), will be boosted by an extra Sh1.3 billion ($9.3 million) from private funders from both Kenya and America.
The US will invest in cattle cooperatives by improving breed genetics to increase milk production in what is aimed at raising the incomes of small-holder farmers and improving the health of cooperative members.
It will also pump money into modernising saccos through climate-smart loans and development of new digital management technologies and supporting cooperative apex bodies, and their efforts to support localisation and effecting of a new cooperative policy across Kenya
The US’s investment is also geared towards reducing youth unemployment in urban and rural areas by developing youth worker cooperative knowledge products.
The investments are expected to unlock Sh6.6 billion ($45 million) in loans to small and medium enterprises (SMEs).
This was announced at the Cooperative Development Partners Consultative Forum, which was hosted by the State Department for Cooperatives.
The investment is part of the Cooperative Development Program (CDP), which is USaid’s flagship programme for cooperatives in Kenya. USaid said the funding will help to address some of the key challenges facing the cooperative sector in Kenya including access to finance, capacity building, and digitalisation.
"Cooperatives are a vital part of the Kenyan economy and society, providing essential services to millions of Kenyans,” said USaid Kenya Office of Economic Growth Deputy David Rogers.
By the end of 2017, there were some 22,344 registered cooperatives in Kenya with a membership of 14 million, according to the Ministry of Cooperatives and MSMEs.
By that time, the movement had mobilised savings amounting to Sh730 billion and issued loans worth more than Sh700 billion. These cooperatives are engaged in various businesses including savings and loan services, marketing of agricultural produce, manufacturing, transportation, wholesale and retail trade, and real estate.
During the period, there were some 5,055 agriculture-based marketing cooperatives in Kenya mainly involved in coffee, dairy, pyrethrum, livestock, cereals, and cotton production and farming.
Further, saccos totalled 13,200, housing and investment cooperatives numbered 1,980, and 192 were registered as consumer cooperatives.
The government has identified cooperatives as crucial to the development of especially rural areas where smallholder agriculture is the main economic activity. “The benefits that have accrued through cooperative societies include employment and wealth creation,” said the ministry.
