Cooperatives big role in Sh50 bn hustler fund

By Symon Mburia

The Kenya Kwanza administration won the just concluded general elections on the promise to revolutionise the economy through the adoption of the bottom – up economic model.

The model targets to grow the economy and create wealth by deliberate empowerment of the majority of citizens at the grassroots.

If successfully implemented the model has the capacity to significantly improve the economic welfare of Kenyans by transforming citizens to owners of capital and from unemployed to employment and wealth creators. 

The model has, in addition, the capacity to improve cohesion and peaceful coexistence of communities, since, when majority of ordinary citizens are owners of wealth then it is unlikely that they will participate in activities that can ruin what they themselves have built with their own sweat.

The reverse model, on the other hand, is where government facilitates the huge conglomerates by giving them concessions through free land use, subsidised energy costs, tax holidays, marketing and distribution protection with the hope that they will employ and provide social protection to those at the bottom of the social economic pyramid.

Ordinarily these concessions end up benefiting the huge firms many of whom are foreign owned and therefore concentrating wealth on foreign firms who at the end of the day repatriate the resultant profits back to their home countries.

The limited number of Jobs created by these firms does not justify the billions of investments by Government. 

The bottom-up economic model resonates well with the cooperative business model which has been in existence in Kenya for more than a hundred years.

The cooperative model facilitates members to aggregate resources and invests communally for their socio-economic benefits.

This, essentially, puts wealth at the hands of ordinary Kenyans who are cooperative members.

Through the cooperative movement Kenyans have established big institutions which include one of largest bank in the country and also the largest cooperative insurance in Africa. You will find successful agro processing facilities, the likes of Githunguri Dairy Cooperatives, Meru Central Dairy cooperative, Kirima Dairy Cooperative and many others. Through cooperatives, many Kenya have bought land, build houses, educated their children and established many private business ventures.

 Some people have argued that the main reason behind the success of Kibaki administration is the support he gave to cooperatives through the then Ministry of Cooperative Development and Marketing.   

During this time cooperatives, especially SACCOs became very vibrant, citizens were able to manage their own socio-economic affairs through their cooperative institutions giving the Government space to focus on other areas of development.

The citizens were so empowered that when some parts of northern Kenya were hit by drought, Kenyans through their cooperatives came together under the ‘Kenya for Kenyans “initiative to supplement government efforts to feed the citizens who were in distress.

It is satisfying to note that the current government means well for the cooperative sector.

Firstly, the president has established a dedicated Ministry of Cooperatives and MSME Development and given it a very clear mandate including the responsibility to ensure that the hustler fund is implemented.  As a matter of fact, the president advices Kenyans to form groups and cooperatives in readiness for the roll out of the Hustler fund. This is a huge win for the cooperative sector and it calls upon all cooperative institutions to set up appropriate institutional mechanisms in preparedness.

Symon Mburia is the acting Chief Executive Officer (CEO),

Kenya Society of Professional Co-operators (KSPC)

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