All SACCOs with more than 10,000 members have been ordered to adopt a delegate system of representation as part of a raft of suggestions to regulate the sector.
According to the government, SACCOs and cooperatives with more than 10,000 members have a poor decision-making process due to the challenges in holding annual meetings.
Consequently, the Cabinet Secretary for the Ministry of Cooperatives and MSMEs Development Services, Wycliffe Oparanya, ordered all SACCOs with a large number of members to amend their by-laws within the next six months to adopt a delegate system of representation.
Under this system, no more than 500 delegates shall be selected to represent the broader membership at general meetings.
“I am directing that all cooperative societies with a membership exceeding 10,000 must amend their by-laws within the next six months to adopt a delegate system of representation,” Oparanya said.
Adding, “This representation must be fair and inclusive, taking into account geographical distribution, gender balance, age diversity, and the inclusion of persons with disabilities.”
In the raft of changes mandated on Thursday, Oparanya said SACCOs’ boards and management must commit to ongoing training.
This is to effectively manage the legal, financial, and ethical challenges of modern cooperative leadership. The training is to establish internationally recognised practices such as member-led oversight, mandatory independent audits, and transparent reporting.
Oparanya, speaking at the Cooperative Leadership Forum, also revealed that the government is equipping cooperatives with the tools and knowledge to manage both financial and operational risks.
“We are also exploring partnerships with financial technology firms to introduce advanced risk management solutions. These tools will enhance the resilience of cooperatives, particularly in managing credit portfolios and addressing emerging financial risks,” he said.
The changes are on top of those that had been communicated earlier. These include the creation of the Deposit Guarantee Fund under the SACCO Societies Act amendments to protect members’ savings, enhance financial stability, and boost confidence in the sector.
The text outlines two key changes that include; the formation of a five-member Committee of Experts to review and update the SACCO Societies Act, 2008, to meet global standards and improve accountability, and the establishment of a new two-year Transition Board for KUSCCO, which is responsible for overseeing organisational changes, protecting member interests, and guiding the evolution of cooperative governance.
