By Sammy Chivanga
Savings and Credit Cooperative Societies (Saccos) are increasingly winning county government staff into the cooperative movement but are dragging their feet on investing in multiple sectors at grassroots level in order to deepen their relevance in the economy.
The lack of properly structured internal policies for making targeting investments is standing in the way of the pace of their integration with counties, leaving large financial players such as banks to steal the show.
Yet, county governments are increasingly seeking financial partners on key projects such as housing and water projects as Saccos prioritize winning new members.
With many county government staff yet to come up with their own Saccos, many Saccos—especially those operating across the devolved units—are now tapping into this new pool of workers for members.
This is a diversification from the past where teachers and farmers have been the core members for many Saccos, leading to the formation of Saccos such as Kenya Highlands Sacco, Mudete Factory Tea Growers Sacco, Kitui Teachers Sacco and Trans Nation Sacco.
Saccos are now turning to this new pool of salary earners for new members, providing the first win into understanding the needs of county governments.
One such Sacco that is betting on counties for growth is the County Sacco Society, which was formerly trading as Rukuriri Tea Growers Sacco.
Rukuriri Tea Growers Sacco started in February 1991 to serve tea farmers whose tea proceeds were being marketed by Rukuriri Tea factory and other factories such as Mungania and Kathangariri tea Factory.
However, the ushering in of the devolved government saw the Mount Kenya-based Sacco rebrand to County Sacco Society in 2011.
“The Society rebranded to County Sacco which literally means an ambitious Sacco with a strategic focus in all counties in Kenya,” says the Saco.
For some Saccos, the coming up of counties has meant mapping their customers in terms of Counties and therefore encouraging them to reach as many places as possible.
For instance, Trans Nation Sacco last year opened what it called the first satellite Sacco branch in Moyale, coming a few months after launching in Marsabit.
The Marsabit branch was doing very well and this motivated us to put up a satellite branch in Moyale. County commissioner launched us in Moyale and joined Sacco alongside part of his staff. This shows the interest in counties,” said Mr Luncham Mugambi, CEO Trans Nation Sacco.
He said Moyale and Marsabit will now be controlled by the Isiolo hub which acts as the main centre for tapping into far flung areas in counties where people want to join the cooperatives movement.
Lengo Savings and Cooperative Society has also partnered with Kilifi County government to sign up the county’s staff as its members.
The Saccos board has been wooing the Kilifi County staff with affordable products that they can manage during retirement.
The board was proposing to register a housing Sacco that will facilitate the building of some offices where the Sacco would rent out.
Despite the race to sign up county staff and make them members of cooperative movement, Saccos have not come out strongly to invest in relevant projects for societies in the devolved units.
Saccos are now being urged to join hands with counties in acquiring land and setting up houses for use by count staff as well as the emerging town centres by the workforce serving counties.
However, Moses Chebor, who served Boresha Sacco (formerly Baringo Teachers cooperative society) for 35 years and retired as CEO, says members of the cooperative movement are dragging their feet in tapping into county opportunities.
“Suspicion and low expertise is making it difficult for Saccos to tap into the many obvious opportunities emerging across the counties. They are falling over each other in recruiting members,” said Mr Chebor.
For instance, Unison Sacco, with the help of the County government of Laikipia, late last year rolled out affordable housing projects in Nanyuki.
Unison Sacco is a Laikipia based deposit taking Sacco established in 1977 as Laikipia Teachers Sacco but changed the name in 2014 and has been strong on recruiting county staff into its membership.
The Sacco has partitioned its 542-acre land in Nanyuki into plots of 50 by 100 and 100 by 100 to customers for construction of a well-planned residential estate, named Taji Gardens.
The estate will be built on land that has utilities such as water, power and a sewerage system, speeding up the project.
Previously Sacco had subdivided the land without involving the county government in making approvals. The lack of a clear sewer line and water system brought their efforts to a halt, and stopped the implementation.
This brought to the fore the growing need for Saccos to partner with county governments in realizing success in project implementation.
The World Bank in 2017 put Kenya’s deficit for houses at two million and asked the government to explore the role of Saccos in bridging the gap in the housing finance market.
But counties have not come out strongly in developing houses and selling or renting to county governments despite the glaring shortage of housing.
Despite Saccos joining Kenya Mortgage Refinancing Company (KMRC) in order to get funding for housing, they are not directly putting up houses to either sell or rent.
Bingwa, Harambee, Imarika, Kenya Police, Imarisha, Mwalimu National, Stima, Tower, Ukulima, Safaricom and Unaitas Saccos are all part of KMRC primary mortgage lender.
However, these Saccos are preoccupied with getting cheap KMRC loans and use it for on-lending the money to members to build houses.
