KUSCO presents highlights of the draft Policy to the PSC of Industry Trade and Cooperatives FILE PHOTO“The proposed Social impact member admission criteria would have been tantamount to diluting the economic democracy of Savings and Credit Co-operatives (Saccos),” KUSCCO says.
According to the Sacco umbrella body KUSCCO (Kenya union of savings and credit cooperatives) which has been at the forefront in lobbying against the contentious amendments, the SIMs admission would have been through a simple resolution at the AGM.
The withdrawn Bill had proposed an amendment of the Co-operative Societies Act introducing this new class of members who would not have been required to purchase shares like the other members.
Despite not being registered members, the SIMs would have however still held equal voting rights with other members. These membership rules would have however not been applicable to the Social Impact Members, SIMs.
According to Sacco Stakeholders, had it been passed, this proposal would have been in violation of the third co-operative principle on economic member participation requiring that members contribute equitably to the capital of their co-operative.
The Bill had also proposed an amendment of the Sacco Societies Act to introduce a Special Fund which would lend to eligible individuals looking to invest in start-ups and the fund would solely be financed by the SIM.
One the major concerns expressed by Sacco players was that the source of these monies would remain unknown to the larger Sacco membership, and this would have left the financial institutions open to even more risks.