The proposed Co-operative bill will see the transformation of Co-operatives in the country into a four-tier structure of primary, secondary, co-operative federations and apex co-operatives.
According to the Draft Co-operatives Societies Act 2021, Primary Co-operatives, which may admit into its membership a corporate or an unincorporated person, shall include producer, housing, Saccos, savings and investment, transport, workers, and consumer co-operatives.
Producer co-operatives will be co-operatives registered with the objective of production, processing, and marketing of members’ produce; while housing co-operatives will be registered with the purpose of facilitating its members to acquire housing.
Saccos will be registered with the principal objective of mobilization of savings and granting loans and advances to their members while Savings and Investment Co-operatives will be registered with the objective of receiving funds from members strictly for making common investment of the funds on behalf of the members or a section of the members.
Transport co-operatives will purposely focus on organising members to operate public transport services and connected purposes while worker co-operatives will be registered with the objective and purpose of organizing workers or professionals to offer a specialized service or group of services.
The objective and purpose of secondary Co-operatives shall be aggregation and warehousing of produce, provision of specialized services, processing and value addition, provision of wholesale credit to members, lobbying and advocacy, information and publicity and education, training and capacity building; though they shall not operate in direct competition with its affiliates.
The Co-operative Federations on the other hand shall establish sub-sector standards for purposes of self-regulation, prescribe and enforce codes of conduct for its affiliates, carry out market research and disseminate its findings for the benefit of its affiliates, provide education and training and provision of specialized services, advocate on behalf of its affiliates in matters relating to co-operative matters, and lobby the government at national and county levels on co-operative matters for and on behalf of its affiliates.
However, there shall only be one registered co-operative federation at any given time within a specific value chain, business line or co-operative subsector; and a co-operative federation shall not provide services which are in direct competition with its affiliates or members.
According to the bill, the apex co-operatives shall be the custodian and champion of the statement of the co-operative identity, shall represent and protect the interests of co-operatives locally and internationally and lobby the government at national and county levels on co-operative matters.
It shall also promote co-operative education, training, research and self-regulation within the cooperatives; provide mechanisms and framework for alternative dispute resolution for co-operative disputes, provide a shared pool of legal services to its affiliates in matters relating to co-operative disputes; provide shared pool of accounting and auditing services to its affiliates, and provide national platform for co-operation among co-operatives.
The apex co-operative is required to prepare and submit to the Commissioner an annual report of its operations and activities, including the performance of its members within four months after the end of its financial year and any other reports that may be required by the Commissioner.
According to the draft bill, an application to register a co-operative shall be made to the Commissioner in the prescribed form in such manner as shall be provided by the Cabinet Secretary in the regulation; and shall be signed by 10 persons representing at least twenty-five prospective members in the case of registration of a primary co-operative, and by at least two primary co-operatives in the case of the of registration of a secondary co-operative.
For the case of a Co-operative Federation, the form shall be signed by at least two (2) secondary co-operatives, and by at least two (2) primary co-operatives in a value chain or business line with no secondary co-operatives.
Regarding protecting identity of co-operative, the bill requires that the word “Co-operative” shall form part of the name of every co-operative, and the word “limited” shall be the last word in the name of every co-operative.
Where the co-operative is registered as a secondary co-operative, the draft law requires the co-operative to incorporate the word “secondary” before the word co-operative in its name; and for the case of a co-operative federation, the co-operative shall incorporate the word “federation” immediately after the word co-operative in its name.
Where a co-operative is registered as a savings and credit co-operative, the word “SACCO” shall form part of the name of every such co-operative.
The draft bill has also provided for mandatory usage of names in certain co-operatives where a co-operative is registered as an investment co-operative, the co-operative shall incorporate the words “savings and investment” immediately before the word “co-operative” as part of its name; and at all times use the said name or the acronym “SICO” or any of its derivatives or any other words indicating the transaction of investment co-operative business or the equivalent, in the name, description or title under which it transacts business.
Where a co-operative is registered as a transport co-operative on the other hand, the draft bill requires that the co-operative to incorporate the word “transport” immediately before the word “co-operative” as part of its name; and at all times use the said name or the abbreviation TRANS-COOP or any of its derivatives or any other words indicating the transaction of transport co-operative business or the equivalent, in the name, description or title under which it transacts business.
For the case of housing cooperatives, the mandatory usage of names requires the co-operative to incorporate the word “housing” immediately before the word “co-operative” as part of its name; and at all times use the said name or any of its derivatives or any other words indicating the transaction of transport cooperative business or the equivalent, in the name, description or title under which it transacts business.
By Roy Hezron
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