State to shut 5,000 Saccos in crackdown

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By Azael Masese

The Government will soon dissolve more than 5,000 dormant co-operative societies as it seeks to tighten the loose ends in the otherwise vibrant sub-sector.
Senior Deputy Commissioner in the State Department for Cooperatives Geoffrey Njang’ombe said that though there are more than 20,000 societies less than a half are active.
“We want to do a cleanup of the register to establish the dormant societies, gazette and eventually dissolve them,” he said. Out of the 20,000 registered, about 10,000 are not active but out of this, some can be revived, he said. Njang’ombe said that they have written to the county governments on the same saying without an audit, it is very difficult to establish the societies’ state.

“There are officers on the ground to confirm which society is still active and the dormant ones so that the necessary step is taken,’ he noted.
However, he said those that can be revitalized, especially those working in what was once pyrethrum and cotton growing areas, will be spared.
Besides, there are those that were registered but never took off due to other factors can be revived.
“We had put clear mechanisms on reviving the societies as some of the co-operatives were the economic main stay in that area,” he noted.
With their collapse, the entire social fabric goes under, subsequently affecting the community’s political and social spheres.
He further stated that a number of counties have embraced revival and have taken this as a blue print to develop their counties using the co-operative vehicle.
“We are currently dealing with registration of many societies. It might be that the dead are starting again or registering another one in the same area to cater for the same people.”
One region that has a high number of dormant societies is the former Nyanza province and this is partly due to the collapse of the pyrethrum and cotton crops.
In Kisii County for example, a number of societies that largely depended on pyrethrum still exist even in the absence of the crop.
In most cases, these societies invested in properties and a number of major buildings in Kisii town and other towns such as Keroka. The buildings are owned by these societies.
“They have some buildings and the management collects some rent and unless they revive they will lose out: there is some expectation that the crop can be revived,” he said.
There are plans to revive the growing of the crop in the area with Njang’ombe saying that if the County Governments show willingness to do so, then they cannot liquidate the societies.
He noted that the logic behind this is that demand for the end products of the two cash crops is still high in the global markets.
When KCC went under, some societies died but when the sector was revived, the societies sprung up and this is the case in the coffee growing areas.
Njang’ombe believes that the same route can be taken when dealing with societies affiliated with cotton and pyrethrum.
According to the 2016 Sacco supervision report released by the Sacco Societies Regulatory Authority, led by John Mwaka, the industry’s loan portfolio risk increased to 5.23 per cent up from 5.12 in 2015, with the value of non-performing loan increasing from Sh13.21 billion to Sh15.57 billion.

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