The Commissioner for Cooperative Development has issued a sweeping directive to all cooperatives in Kenya with more than 5,000 members, requiring them to overhaul their governance structures in a move aimed at strengthening transparency and member representation within the Savings and Credit Cooperative Organizations (Saccos).
According to the circular issued by Commissioner David Obonyo, the Saccos must implement a delegate system for general meetings, revise their bylaws to reflect this new structure, and establish clear communication channels with their members. They have been given six months to comply.
“All cooperatives with a membership exceeding 5,000 are hereby directed to adopt a delegate system of representation in their general meetings,” the Commissioner stated. “The number of delegates shall not be fewer than 150 and not exceed 500.”
Adding that cooperatives should “device an effective mechanism to apprise the general membership on the affairs of their cooperative.”
The delegate system is intended to make Sacco meetings more efficient and representative, given the logistical challenges of hosting thousands of members at once.
By selecting delegates to attend and vote at general meetings, the directive aims to ensure orderly governance and greater participation from members through elected representation.
In addition to the structural changes, Saccos are also required to update their bylaws to formally recognise the delegate model and to create clear mechanisms for sharing regular updates with the wider membership on cooperative affairs.
The directive is part of broader reforms targeting large cooperatives, many of which have come under scrutiny in recent months over financial mismanagement, poor member engagement, weak internal controls, and governance disputes.
In December last year, an affiliate meeting at the Kenya Union of Savings and Credit Cooperatives laid the rot at the umbrella body that threatened to cripple its operations and destabilise the state of Saccos and cooperatives in Kenya.
A forensic report presented in the meeting that was attended by the Cooperatives Cabinet Secretary, Wycliffe Oparanya, revealed widespread financial irregularities amounting to Ksh12 billion in financial losses within the national body.
In March this year, the Cabinet approved amendments to the Savings and Credit Cooperatives (SACCOs) Act, 2008, as part of the measures to enhance the stability, efficiency, and competitiveness of credit societies.
According to a Cabinet dispatch, the reforms aim to modernise the financial and technological operations of Saccos, particularly the smaller cooperative societies.
Key amendments include the formation of a Sacco Shared Services Framework to allow financial institutions to pool resources, adopt fintech solutions, and enhance cooperation while maintaining operational independence.
