The Kenya Society of Professional Co-operators (KSPC) has urged the Commissioner of Co-operative Development (CCD) to develop a policy guide that will enable co-ops to function in a way that will help open the common bond to the general public.
The professional body has argued that though the opening of a common bond in the cooperative movement, moreso in the Savings and Credit Cooperatives (SACCOs), is a good move, but should be cautiously done and in line with the cooperatives’ needs and objectives.
During a recent workshop, the professionals warned that if the opening of a common bond is not done in a controlled manner, it will throw cooperatives and particular Saccos into jeopardy of notably contributing to increased loan defaulters and dormant members.
“The commissioner should limit cooperatives from lifting their common aspirations, and the new cooperatives should have a clear commonality between them,” reads the KSPC resolution contained in a dispatch released after the meeting, which was held at the Nokras Riverine Hotel, Sagana.
Common bond, or the bond association, is the social connection by members of a credit financial institution, whereby cooperatives recruit members outside their jurisdiction. For instance, a common bond occurs when a coffee-affiliated co-operative opens its doors to include members from other sectors like traders.
In Kenya, the Co-operative Act was amended in 1997 to allow other types of common bonds in addition to the original bond.
A good number of co-operative stakeholders have argued that opening of common bond and paying of unrealistic dividends among co-operatives in particular Saccos has been a major factor behind the collapse of some giant Saccos in the country.
Worker Cooperatives
KSPC at the same time has urged the government to maintain the current threshold of 10 members or less, which is required to form workers cooperatives.
This as per the cooperatives; practitioners will more effectively respond to market demands and provide employment opportunities in fluctuating economies, hence proposing an exemption to preserve this adaptability and support grassroots economic growth.
“A policy for worker cooperatives is essential as it provides formal recognition and establishes a legal framework tailored to their unique operational and governance model. This ensures that worker cooperatives are adequately supported through mechanisms such as specialised financial support, training, and technical assistance, addressing common challenges like capital access and market navigation,” said KSPC.
According to the professional body, raising the minimum membership for worker cooperative formation and registration to 25 could stifle the economic contributions of worker cooperatives, which thrive on agility and the ability to start with minimal initial investment.
This increase may complicate operations and slow decision-making, critical in industries where work is intermittent or seasonal. An exemption for worker cooperatives would support economic resilience and job creation in diverse sectors.
Youth and Co-operatives
KSPC has also called for the development of a national strategy for engaging youth into cooperatives, with the strategy targeting educational programs, mentorship opportunities, and start-up incentives that are tailored to the interests and technological aptitudes of the youth.
Such initiatives should be rolled out comprehensively across counties to ensure nationwide reach and impact, with the professional body recommending that the State Department for Cooperatives (SDC), in collaboration with cooperative associations, initiate a task force to design this youth engagement strategy, setting measurable targets for increasing youth membership in cooperatives by at least 40 percent over the next five years.
This strategic approach will not only invigorate the cooperative sector but also empower the youth economically and socially, ensuring the sector’s growth and sustainability.
Further, KSPC has urged the SDC to liaise with the Kenya Bureau of Statistics (KBS) to collect relevant data on cooperatives for use in planning, noting that it is vital to have the records so as to effectively appreciate the economic potential of the cooperative sector, which contributes approximately 43 percent to Kenya’s GDP, and accurate and current data is crucial.
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The professional body observed that there is a need for updated data since the most recent available data on the number of cooperatives in Kenya dates back to 2016.Thus, recommending that the SDC advocate for the inclusion of specific questions in the 2029 national census to capture not only the number of cooperative members and cooperatives but also classify them by type—such as agricultural, savings and credit, housing, worker, and consumer.
This initiative will provide foundational data that can be further refined and expanded upon in subsequent surveys or dedicated studies. Establishing a regular data collection framework for the cooperative sector will facilitate more informed policy-making, enhance strategic planning, and ultimately promote the sector’s contribution to the national economy.
Other recommendations include the development of guidelines on how to implement the principle of cooperation among cooperatives in view of devolution, developing policy on cooperative education, training, and information; coming up with guidelines on capitalisation of cooperatives and accounting for members equity and on financing member education; developing guidelines on implementing cooperative principles; and having cooperative auditors undergo training for orientation on matters of auditing.
By Roy Hezron
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