Fake Sacco service providers to be locked out

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By Stephen Makabila

It will not be business as usual for the increasingly vibrant service providers in the Co-operative Sector when the new Co-operative policy is operationalised soon.
The government, through the State Department of Co-operatives, now plans to vet service providers to ensure briefcase firms milking Saccos and Co-operatives are locked out.
“There are a lot of briefcase service providers which offer Saccos programmes that do not work, yet millions of shillings are used to procure such services. All this is going to end because no service provider will operate in the country without government’s express certification,” Senior Deputy Commissioner of Co-operatives in charge of Registration, Geoffrey Njang’ombe told the Sacco Review.
Most of the service providers in the co-operative sector offer mobile technological services, financial services and financial advisory services among others.
Njangombe said already some service providers milking co-operatives have been ear-marked, and some have frustrated efforts to close them by rushing to seek court protection.
“They can rush to court for now but when we start the certifying process as per the new co-operative policy, there will be nowhere to hide,” added Njang’ombe.
The need for technological advancement in service provision has pushed most Saccos to seek the input of service providers as competition for membership intensifies following the recent rebranding and opening of common bond wave.
Established Service providers have welcomed the government move, noting they face unfair competition from briefcase service providers.
“Yes, that is the way to go because there are some providers crowding the sector but they offer nothing you can write home about,” a senior manager with one of the leading Nairobi based service provider told the Sacco Review.
Apart from the latest government attempts to ensure clarity in the service provision, the Financial Sector Deepening (FSD) Kenya had in the year 2013, as part of the Sacco reforms project implemented through a partnership between the Sacco Societies Regulatory Authority (SASRA) , MicroSave and the Cooperative University Kenya (CUK) launched a programme to develop capacities of consultants/service providers in the area of individual lending and delinquency management; and risk management for the deposit taking Saccos.
The programme consisted of a five-day classroom training of trainers and field based consultancy supervised assignment in each of the tracks, with qualifying consultants in each of the disciplines being certified for proficiency.
The process was highly competitive and only those who met the set standards were certified. It was anticipated that certified consultants will in future provide both training and consulting services as certified services providers (CSPs) to deposit taking Saccos.
FSD Kenya operates as an independent Trust registered in Kenya under the supervision of professional trustees, with policy guidance from its programme investment committee.
Finance is provided by a number of leading development agencies including the UK’S Department for International Development (DFID), the World Bank, the Swedish International Development Agency (SIDA), Agence Française de Développement (AFD) and the Bill and Melinda Gates Foundation together with the Government of Kenya.
And apart from zeroing on service providers, the government was also keen on reigning on church leaders who also operate Saccos.
“We want church leaders to concentrate on preaching the gospel, fight evil in society and help people to go to heaven. They should keep off the idea of running church based Saccos,” noted Njang’ombe.
He said though there were a few church based Saccos which are above board, some of the up-coming saccos in new churches were not transparent in their activities and members risk losing their lifetime savings.
“As a government, that is what we want to do before it is too late,” noted Njang’ombe.

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