Sacco Times Magazine attempts to establish why Kenya’s co-operative movement is rated as a major player in the country’s economy, on a one on one question (Q) and Answer (A) interview with Ali Noor Ismail, Principal Secretary, State Department for Co-Operatives, during the CIC Group 50th anniversary.
Q. Thank you for this opportunity. Kindly rate Kenya’s cooperative movement
A. You are most welcomed. Well, the Co-operative movement in Kenya is rated first in Africa. It has over 22,000 registered co-operative societies commanding a membership of over 14 Million and employing more than 500,000 Kenyans directly and another 1.5 Million indirectly.
Q. What about mobilization of savings
A. Not just savings alone but even deposits. Co-operatives in Kenya have mobilized members’ savings and deposits of over Ksh 732 billion, with an asset base of over Sh1trillion and a loan portfolio exceeding Ksh 700 billion as at 2017.
Q. How does that compare in terms of national savings
A. If these statistics are to go by then Comparatively, Co-operatives contribute to about 30 per cent of the National savings.
Q. What does 30% mean to the saving community
A. This enhance financial inclusion through mobilization of savings and ease of access to affordable financial services.
Q. What are the parameters for Cooperatives
A. Co-operative movement in Kenya cuts across all sectors of the economy including agriculture, finance, insurance, health care, transport, education and training, agro-processing and manufacturing activities, which form the basis for cooperative parameters.
Q. Let’s talk of Low Cost Affordable Homes…
A. (Without letting the interviewer to finish his statement) A large proportion of land and buildings in this country is owned by co-operatives with the housing cooperatives expected to provide 25 per cent of the 500,000 houses required across the country under the Low Cost Affordable Homes (LCAH) program of the Big 4 Agenda.
Q. What is the mandate of your department
A. Our mandate (The State Department for Co-operatives) is to create a conducive environment for the growth and development of the co-operative sector through appropriate policy and legal framework.
Q. What about governance
A. The department is also mandated to promote good corporate governance, enforce ethical conduct and anti-corruption reforms within the co-operative societies through responsive education and training, advisory services, investigations and financial disclosure process.
Q. The co-operative movement faces challenges like weak governance; poor management and corruption among others. How does your department handle such cases?
A. In an effort to address these challenges the Department signed a Memorandum of Understanding (MOU) with the Ethics and Anti-Corruption Commission (EACC) on combating and preventing corruption, economic crime and unethical practices in the cooperative sector.
Q. What does the MOU encompass
A. The MoU will encompass lifestyle audits and assets recovery, integrity testing for co-operative sector officials, and prosecution of cases on corruption and economic crime.
Q. How do you attribute the greatest contribution of Cooperatives in Kenya
A. The greatest contribution attributed to cooperatives in the Kenya ‘s social and economic development has been in the financial sector, where Saccos and national financial cooperative organizations, Cooperative Bank and Cooperative Insurance Company (CIC), hold substantial savings portfolio accounting for more than 31 per cent of the country’s gross national savings.
Q. Emerging sectors such as ICT, are leveraging on the demands of the traditional cooperatives to infuse innovation and technology in their operations. How do you safeguard all these gains?
A. The Government has taken various measures to ensure that the movement operates according to international best practice. These include the establishment of the Sacco Societies Regulatory Authority (Sasra) through the Sacco Societies Act 2008, which introduced prudential regulations covering all deposit-taking Saccos to enhance transparency and accountability in the fast growing sub-sector. It is anticipated that the move will also spur economic growth through mobilization of domestic savings.
Q. What can you say lastly about cooperatives and GDP
A. Kenya and South Africa are the only countries in Africa with independent regulators and specific regulations for Saccos. As a result, Kenya has the highest proportion, in percentage points of GDP attributable to cooperatives globally, standing at 45 per cent, followed by New Zealand with 22 per cent.
The cooperative movement worldwide has about 800 million members in over 100 countries and is estimated to account for more than 100 million jobs around the world.