Kenyan Coops yet to enter Healthcare business, despite a glaring niche

Within Kenya’s healthcare system lies a growing threat: medical debt. Many households, particularly those in low-income brackets, struggle to pay their medical bills, often forced to choose between their health and financial stability.

This presents a critical opportunity for cooperative societies to step in by running health facilities or offering medical insurance cover or credit to help members settle hospital bills.

Despite this potential, most Kenyan cooperative societies remain largely inactive in addressing this gap.

The entry of cooperative societies into the healthcare sector would enable members to access medical loans at minimal cost, while also improving the overall health and well-being of both members and the wider communities they serve.

CIC Insurance Group PLC, along with other major players such as Britam, has introduced health insurance solutions specifically tailored for cooperative members. However, no cooperative society has directly ventured into the medical insurance business or established and operated healthcare facilities.

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Britam offers a SACCO solution, a unique insurance product designed for SACCO members, which includes inpatient benefits, accidental death cover, accidental total permanent disability cover and a funeral benefit. However, this product is not a stand-alone facility. Jubilee Insurance has a similar arrangement in partnership with Solution SACCO.

Top executives in the cooperative sector note that, while there are no legal barriers preventing societies from entering the medical field, there is a need to provide structured support for those wishing to venture into this space much like the backing previously extended to financial and agricultural cooperatives.

“We have a structural problem within the cooperative sector that can only be addressed through support from the government, channeled via the Cooperative Alliance of Kenya (CAK),  the umbrella body for all cooperative value chains, including financial (SACCOs), agricultural (e.g. coffee, tea, pyrethrum, horticulture), housing  and investment cooperatives,” said Solomon Atsiaya, CEO of Kenya National Police SACCO Society Limited.

Atsiaya noted in an interview with SACCO Review that, unlike in countries such as Spain, Japan, and other developed economies where health cooperatives exist and even operate medical facilities, the health sector in Kenya has largely been left to private players, with the state relying on taxes to run public healthcare services.

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Currently, employees in the health sector are served by Afya SACCO, while members of other cooperative societies rely on insurance companies for medical cover.

However, it remains to be seen whether the Kenyan market is ready to embrace health cooperatives.

“Kenyans still have many options for settling their medical bills, including cover provided by the state-run Social Health Authority (SHA), as well as a wide range of products from insurance firms. The need to establish a health cooperative society has therefore not arisen, largely due to a lack of demand for such services,” said Harambee Investment Cooperative Society (HICS) Chief Executive Officer Gichuki Kabukuru.

It is also evident that the absence of health cooperatives in Kenya can, in part, be attributed to regulatory constraints.

“There are no legal barriers preventing those interested in forming health cooperatives, provided they meet the necessary requirements to register a cooperative society,” said Yvonne Gatobu, Manager of Corporate Communications at the SACCO Societies Regulatory Authority (SASRA).

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The first health cooperative was established in 1929 by Dr Michael Shadid, a Lebanese physician, in Elk City, Oklahoma.

With support from the Oklahoma Farmers Union, Dr Shadid was able to build a hospital and establish a prepaid insurance plan. This idea led to the creation of more regional health cooperatives, offering networks of healthcare plans and providers.

Today, HealthPartners USA has an insured membership base of over 1.8 million, operates more than 90 clinics and hospitals across the country, and serves over 1.2 million patients.

Globally, health cooperatives operate as entities owned and managed by health professionals, service users, or a hybrid model involving both groups.

There are currently no active health cooperatives in Kenya, making it a promising area for exploration given its numerous potential benefits.

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