The people of Nyanza have been urged to adopt the cooperative model to improve their socio-economic standing. The Cabinet Secretary for the Ministry of Co-operatives and MSMEs Development, Mr. Wycliffe Oparanya, said the model was the best option for the region to invest in.
Speaking in Kisumu during the Nyanza International Investment Conference, Oparanya noted that the cooperative sector controls a substantial capital base worth billions of shillings, highlighting the need to invest in this sector.
The CS added that the government is committed to reviving the sector moving forward.
He mentioned that many people, including himself, have benefited through cooperative shares.
The CS stated that the government has established a loan verification committee, chaired by the Commissioner of Cooperatives, to monitor borrowing by cooperative management teams to prevent unnecessary debt accumulation.
“Cooperatives have been plagued by poor management and misuse of members’ savings, and this bill aims to address these issues once it becomes law,” Oparanya said.
Oparanya further mentioned that despite the government’s efforts to alleviate cooperative debts through waivers totaling billions of shillings, many societies continue to struggle with rising debts that have left tens of members in limbo.
He criticized some SACCO directors for misusing loans, which has left many societies facing unmanageable debt, while others have been forced to shut down, noting that the government waiver system is unstable.
The CS highlighted that debt in the coffee sector has increased from Sh6 billion to Sh7 billion in just a few months, with some management teams borrowing funds for personal use.
He added that Sh4 billion has been paid to offset some of the runaway debts in the sugar sector, even as other verification exercises by the established committee continue to check the authenticity of claims before further payments are made.
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Oparanya lauded the growth of the cooperative movement in Kenya, which he said ranks first in Africa, with an accumulated savings portfolio of Sh1.2 trillion, over Sh1 trillion of which has been issued as loans to members.
He emphasized the need to shift from small-scale lending to financing manufacturing, which will spur economic growth and create jobs, with cooperatives playing a central role.
Oparanya called for the inclusion of more youth in cooperatives, given the decline in white-collar job opportunities, with current data indicating that the majority of members are from the older generation.
A committee has already been established to review borrowing practices.
By Fredrick Odiero.
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