Cooperatives Cabinet Secretary Wycliffe Oparanya is plan to table a new bill in the National Assembly that will ensure co-operative societies are run efficiently without members losing their savings.
The Cooperative Societies Bill of 2024 will address long-standing governance problems in the cooperatives sector and reduce conflicts of interest between various organs of a cooperative institution.
It will explicitly define the roles and responsibilities of members, boards of directors and management. Additionally, it will also define the tenure and eligibility of those serving in various positions.
The move to facilitate the new bill comes after an increase in cases of cooperative members losing their hard-earned cash to fraudulent schemes disguised as savings and credit cooperative societies (Saccos).
CS Oparanya noted that the new bill, which will seek to curb extortion of members, is ready and will be presented to Parliament soon.
The CS divulged plans about the new bill during the annual general meeting of Lompasago Sacco held at St Michaels Primary in Nairobi.
While commenting about the state of cooperatives, the CS, lamented that the cooperative sector is still bedevilled by many issues.
“The major issue I found in cooperatives is governance. Some of the cooperatives are governed very poorly,” he noted.
“There is a lot of mismanagement of cooperatives. Members’ money is stolen outright. And it’s the responsibility of the board to ensure that members’ contributions are safe.”
He lamented that members keep on electing leaders to the board some of who do not have their best interest at heart or stay at the party too long.
“You will find that in some Saccos, the board chairs have been in office for over 30 years. They just keep winning elections. Why can’t one do six years and let someone else also run the Sacco,” he posed.
The CS also blamed members for being overbearing to their Saccos demanding bounty dividends. “Members demand dividends even when their Sacco is making losses. This forces some Saccos to pay dividends from the capital,” he noted adding that the habit of demanding dividends that match those of rival Saccos contributes to the mismanagement of Saccos.
