COOPERATIVES BUILD A BETTER WORLD

Mr. Simon Chelugui, Cabinet Secretary for Co-operatives and Micro,Small and Medium Enterprises.
cropped-leaderboard-ad

By Agnes Mbithi

Over the years, cooperatives have grown to greater heights. They have brought a lot of benefits to their members. A cooperative can be termed as an association or organization that is owned and controlled by the people to meet their common economic, social or cultural needs and aspirations through a jointly-owned and a democratically controlled business. The history of cooperatives can be traced back in the early 1908 where the first Co-operative Society was formed for the white settlers to market their dairy products. During that time there was no specific co-operative legislation.  The society that was formed was therefore   registered under the Business Practices Ordinance as legislated in the Great Britain, adopted in India and practised in Kenya. The cooperative society was also formed to address the farming needs, livestock requirements and marketing channels for the products within its area of operation.

Kenya counts seven International Co-operative Alliance full member organizations and one associate member.  They include: African Confederation of Cooperative Savings & Credit Associations, Cooperative Bank of Kenya, Cooperative Alliance of Kenya (CAK), National Cooperative Housing Union Ltd (NACHU), Cooperative Insurance Company   of Kenya Ltd (CIC), Kenya Cooperative Coffee Exporters Ltd (KCCE), Cooperative University of Kenya (CUK)   and Kenya Union of Savings and Credit Cooperative Ltd (KUSCCO).

KUSCCO is the umbrella body for SACCOs and its main roles are approvals and representation. Moreover, KUSCCO offers SACCOs and other cooperatives both financial and technical assistance, which are custom-made to mostly benefit the middle and the low-income earners both in the rural and urban areas.

Due to the increased number of cooperatives in Kenya, they vary depending on the services that they offer and the way their   members are organized. The other aspect they differ in is depending on the economic activities undertaken, how members use and benefit from them and the kind of management that they have. There are a number of classifications into which cooperatives can be put: agricultural co-operatives, consumer co-operatives, credit unions, housing cooperatives, insurance co-operatives and workers’ co-operatives. Just to give a brief detail, the types of SACCOs that are in existence in Kenya include:

Savings and credit co-operative societies

SACCOs are formed to provide financial support to members. They take deposits from members and they grant them loans at competitive interest rates in times of emergency or need. The key role of SACCOs is to promote savings among its members. They gives members an opportunity to accumulate their savings and deposits so as to create a source of funds from which loans can be given , entirely for productive purposes, at a fair and reasonable interest rates.

Housing co-operatives societies

The housing cooperatives were formed to provide residential houses to their members. In this case, the cooperative purchases land, they develop and construct houses and administer them  to members. Some housing cooperatives provide their members with   loans at low interest rates to build their own houses.

Consumer co-operatives societies

The consumer cooperatives are formed to make goods available to the general consumers at reasonable prices. They buy goods directly from the manufactures thus eliminating middlemen in the process of distribution.

Agriculture/Farmers’ Co-operative Societies

These types of cooperatives are   formed by small scale farmers so that they can work jointly, hence enjoying   the benefits of large-scale farming (economies of scale).

Producer co-operative societies

These were among the first cooperatives to be developed and their purpose is to provide solutions to farmers’ production. They are formed to protect the interest of the small producers by making items available for them for their production needs like:  raw material, tools, equipment and machinery among others.

Marketing co-operative societies

These types of cooperatives were formed by a number of producers as well as manufactures who find it difficult to sell their products in the market. Members of these cooperatives provide the organization with the same production as that of their markets but in a value added form. The co-operatives mandate is to profit the members’ input by seeking the best price possible in the market.

It was pomp and ceremony during the 2022 Ushirika Day.

 CO-OPERATIVE PRINCIPLES

Cooperatives all over the world operate under the same core principles and values, adopted by the International Co-operative Alliance. They are seven in number and include:

Open and voluntary membership

The open and voluntary membership principle ensures that membership in all cooperatives is open to all kinds of people especially those who can use the services offered by the particular type of cooperative reasonably. The principle also ensures that members join the particular organization willingly and they  should be able to abide by  all the responsibilities that come along with the membership process, regardless of the person’s race, religion, the gender, or even  his or her  economic circumstances.

Democratic member control

This is one of the fundamental principles of cooperatives.  They are controlled democratically by their members. This simply means one vote per member, regardless of the investment in business conducted by the cooperative. The men and women who serve as elected representatives are liable to the membership. Thus has enabled members and managers understand what control is and how it can be exercised.

Member economic participation

In this principle, members contribute equitably to and democratically control the capital of their co-operative. The cooperative maintains democratic control over the collected capital in that a portion of the same is considered as a property of the group. As a condition, members usually receive limited compensation, in case of any, on the capital subscribed.

Autonomy and independence

Members of cooperatives are the key determining forces behind new policies and decisions. This ensures that cooperatives are able to run without the influences of a wider government policy or other organizations. In the event   that they have entered into agreements with other organizations or raise capital from external sources, then they have to do so on terms that ensure that democratic control is exercised as well as their unique identity.

Education, training and information

This principle   seeks to provide education and training for members, elected representatives, managers and employees in order to help them effectively contribute to the development of their cooperative. It   can be provided by selected individual experts or training institutions. Some  forms of training include: seminars, workshops or tailor made programmes, open and distance learning, self-directed learning guided by organized tutoring, networking  (especially through peer learning) , long-term training programmes as well as training of trainers and members.

Cooperation among cooperatives

All cooperatives have a collective goal which is to help all their peers to prosper. Cooperatives improve services, strengthen local economies, and deal more effectively with social and community needs by working together through local, national, regional and international structures. This principle ensures that cooperatives work together thus fostering an effective way of strengthening the cooperative movement.

Concern for community

All cooperatives focus on their internal communities. Nevertheless, they are also concerned with their local communities. This principle states that cooperatives work for the sustainable development of their communities through policies supported by the membership. Cooperatives contribute to the community’s sustainability by sourcing material from and investing in local suppliers. Sustainability doesn’t stop at the local level , it extends  globally.

These   principles have helped cooperatives operate under the same core values,  thus promoting a favourable environment for  their  members as well as building growth in the community. They contribute to and democratically control the capital that is generated from cooperatives. In that respect,  the greater the member participation, the greater the return in the form of extra products, preferred loan rates and savings yields, as well as   lower and reduced fees.

cropped-leaderboard-ad

LEAVE A REPLY

Please enter your comment!
Please enter your name here