Matatu Saccos to be transformed to cooperatives

BySacco Review

Jan 6, 2021
Metrotrans Sacco Isuzu buses fleet acquired being driven off from Isuzu (E.A) after the handing over ceremony. Photo/File

By Roy Hezron

Matatu Saccos will soon be renamed transport cooperatives to reflect their nature of business.

Cooperatives Commissioner Geoffrey Njang’ombe said a task force mandated with implementation of the new cooperatives policy will guide the transformation.

Njang’ombe said the team, which is expected to be gazetted soon, will carry out wide consultation before implementing the changes.

“If you go to the field, most matatu Saccos may not be aware about the intended changes,” the Commissioner told Sacco Review in an interview.

He said a number of frameworks, including draft by-laws, a code of conduct and the concept paper, are already in place.

“The team will be gazetted anytime from now and we have draft by-laws in place, a code of conduct and a concept paper and the team will pick from where we left,” said Njang’ombe.  

A discussion paper for the transformation of the name matatu Saccos to transport co-operatives prepared by the State Department for Co-operatives (SDC) says the use of the word Sacco on Public Service Vehicles does not describe the core activity that matatus are involved in.

“Sacco denotes saving and credit co-operative organization- a financial business whilst PSVs are in transport business. SDC is thus proposing to change the name of PSV Sacco to PSV Transport Cooperatives or in abbreviation “Trans-coop”. In this way the name will define all activities of the transport service industry,” reads the document.

To achieve the rebranding, the SDC developed draft by-laws that focus on the PSV business activity.

The by-laws include the decision-making organs and implementing structures and their powers, focus on the status of the business tools, how business is conducted to ensure self-regulation and adherence to agreed code of conduct and collaboration with other relevant organs like police or licensing bodies in enhancing self-regulation.

This will also enable transparent accounting of money received in societies and from the foregoing, the current Sacco business will be delinked from the transport co-operative society for effective operations and management.

 “The policy then, intended to target route management which was under the welfare banner but misdirected itself to target the Sacco activity. Therefore, in spite of the Sacco management gaining the TLB password, they lacked the necessary framework to control the actual operations of the vehicles,” says the document.

For effective transition, the department proposed that all committee members of existing Saccos undergo sensitization sessions.

Committees will be required to organise sensitisation meetings for their members to explain the new changes, implications and ratification of the by-laws to be amended.

Transport societies will be required to consider the possibility of either delinking or strengthening existing savings and credit societies as an entity within the society to include all players in the common bond.

A spot check by Sacco Review in Nairobi revealed that many matatu sacco leaders are not aware of the new policy and what is required of them.

The Co-operative Policy 2019, which was approved by Cabinet in November last year, aims at creating and facilitating an environment that promotes sustainable and competitive co-operative societies to support industrialisation in a devolved system of governance.

Among other things, it seeks to transform the PSV operations and management since public service transport is of immense economic importance and impacts directly and indirectly on the lives of many people.

“To streamline the operations of the sector, the government directed that operators would either be limited companies or cooperatives. For ease of management and operation, many small operators chose the cooperative model as opposed to the company model,” reads the policy in part.

The policy notes the establishment of matatu Saccos in the transport sector had not brought about the anticipated changes.

“Despite making savings in their Saccos, many of the members of these societies still operate their matatu business as individuals thus defeating the government policy on transport,” the policy reads.

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