Diversify from check-offs to MSME markets, Saccos challenged


Cooperative Commissioner David Obonyo has called for a paradigm shift on how Saccos conduct their businesses, warning that relying on the check off system is no longer tenable.

Most Saccos, Obonyo stated, were employee-based that depend on a check off at the end of the month to give loans, turning their back on millions in informal employment.

“The population of Kenyans in formal employment is less than five percent and depending on it translates to serving only a small percentage of the Kenyan population,” he said.

Obonyo said the youth make up of more than thirty five percent of Kenyan earners hence the need to bring them on board.

Majority of Saccos have opened the common bond, allowing the business community to join and enjoy the benefits that come along with the membership.

He said that the rebranding and opening their common bond to accommodate a bigger community wasn’t enough and they needed to target where the population is.

“What are we doing to improve the lives and the income of the members that join our Saccos?” He posed.

He called on the need for Saccos to come up with products that are SME oriented and facilitate the growth of the businesses.

He added that Saccos that had not yet fully embraced the use of technology in their businesses to establish mechanisms that would help them transit into modern ways of running businesses or face extinction.

However, he discouraged the cooperative leaders from using technology as an excuse to embezzle or misuse members’ funds.

Cooperatives, he said, were in the business of changing the lives of the people and necessarily not making money.

“We need to ensure members live in decent homes, are able to meet the cost of education of their children and address their daily needs in life,” he said.

On the other hand, he pointed out that Sacco leaders should not open branches haphazardly, nor give indiscriminate loans that do not perform, ending up hurting the Saccos.

Though it is appropriate to continuously keep looking for new available opportunities, Obonyo reminded Saccos to first carry out due diligence before allowing new members in.

As a devolved function, Obonyo challenged Sacco leaders to take the sector to the next level.
“At the county level, the county government has deployed officers to support the Cooperative functions,” he said.

He challenged them to look beyond region and compete with Europe and the Western economies.
He identified the creation of the standalone Ministry of Cooperative and SME as a critical investment aimed at creating an enabling environment, giving policy direction, legal framework and investment that will enable cooperatives realize their aspirations.

Obonyo said skilled students from TVETs and colleges can be brought together to form a worker cooperative and make it easy for them to acquire jobs in government and other institutions, yet save to build their own Saccos.

By George Otieno

Get more stories from our website: Sacco Review. For comments and clarifications, write to :Saccoreview@shrendpublishers.co.ke

Kindly follow us via our social media pages on Facebook: Sacco Review Newspaper for timely update

Sharing is caring!

Not Allowed