Kenya Cooperatives Societies Yearbook 2020 by Investment News

2019/2020 Edition

Kenya Cooperative Societies

Yearbook A reflection on an immense contribution to the economy

Concern for Community

Kenya Cooperative Societies Yearbook 2019/2020

PUBLISHING DETAILS The Kenya Cooperative Societies Yearbook is published by the Nairobi Editing and Publishing Services. Its mission is to become an indispensable record of annual milestones in the cooperative movement.

Table of

Contents

Contact details: Nairobi Editing and Publishing Services,

Foreword

2–3

Editor’s word

Notebook

5–6

Events

7–10

Partnerships

11–12

Research

13–14

EDITORIAL ADVISORY BOARD

Policies & regulations

16–21

Impact of Coops

23–29

MOSES CHEBOR (CEO), Boresha Sacco Society Ltd

Sasra DT-Sacco Report

31–33

Theme activities

35–39

Front runners

40–44

Personalities of the year

45–54

People on the move

P.O. Box 20257-00100 Nairobi, Kenya. Tel:

0721-302418, 0773991820

Email: kcsy@gmail.com emmamuli@yahoo.com

MATHEW RUTO (Chairman), Imarisha Sacco Society Ltd JAMES KAHIRO (Chairman), 2NK Sacco Society Ltd KEN SUNGU (Chairman), Bandari Sacco Society Ltd JUMA SIMWELO (CEO), Egerton University Sacco Society Ltd ALFRED MLOLWA (Chairman), Qwetu Sacco Society Ltd MARTIN MALILA (CEO), Machakos Cooperative Union

Kenya Cooperative Societies Yearbook 2019/2020

The

Foreword

I am delighted to write the foreword to this Edition of the Kenya Cooperative Societies Yearbook. I am confident that the Yearbook will bridge a real gap through documentation of annual milestones in the cooperative movement and personalities behind them, creating inspiration among stakeholders so necessary for the continued growth of the movement. The cooperative movement has grown significantly in terms of assets, products and membership pointing to the need for a more informed management. Today, savings by Saccos alone are more than Shs 720 billion. The Kenya Financial Sector Stability Report states “Sustained regulatory interventions have led to growth in core capital by 16.95 percent, which has in turn enabled DTSs (deposit-taking Sacco's) to adopt technology in delivery of new products and services. Key stability indicators show that Sacco societies have adequate buffers to absorb business risks as measured by capital adequacy, liquidity, capacity to generate earnings and members’ confidence.” Further, the Sacco subsector has become more diversified and complex. The opening of the common bond brought in members with diverse interests, needs and demands. More importantly Sacco's are expanding in membership to reach groups that were not reached before.

‘Building a successful cooperative is challenging. It takes perseverance, integrity as well as good ideas and strategies.

’

According to a recent study conducted by SASRA, The Sacco Subsector Demographics Study Report 2019, by the end of 2018, the majority of deposit-taking Sacco members were within the age group 18 to 50 years. That group actually makes nearly 59 per of the total membership with the youth below 35 years making one third of the total Sacco membership. And unlike what is commonly assumed, more young people – between the ages of 18 and 24 years – are becoming members of farmer-based Saccos, accounting for 58.9% of the total

Kenya Cooperative Societies Yearbook 2019/2020

membership. This encouraging trend debunks the idea that Sacco's are for salaried, urbanized and older populations. The result of these developments is that saccos are playing a critical role in the provision of credit facilities to Kenyans, and in the mobilization of savings for credit and youth employment in all regions and sectors of the country. The success trends should make all of us in the movement justifiably proud of our work because building a successful cooperative is challenging. It takes

perseverance, integrity as well as good ideas and strategies.

‘The success trends should make all of us in the movement justifiably proud of our work.

’

Cooperatives are about developing communities. When we build successful cooperatives it’s about all of us: It’s about how we collectively view leadership; each of us recognizing the worth and potential of others so strongly that they begin to see it for themselves. It’s about drawing out the best in us. It’s about recognizing that everyone who has been involved in the success of a cooperative has a story to tell from which we can learn. Therefore, stories that feature the management styles of successful cooperative leadership such as those in the Yearbook, inspire others to learn from them and to innovate in their own ways. It is for this reason that I heartily welcome this Edition of the Kenya Cooperatives Societies Yearbook.

John M. Mwaka Chief Executive Officer SASRA

Kenya Cooperative Societies Yearbook 2019/2020

A Word from

The Editor “Concern for Community” is the theme of this issue of the Kenya Cooperative Societies Yearbook. The theme was chosen because concern with social well-being of others is the essence of the Cooperative business model embedded within the movement’s core values and principles. It is because of this that we feature two Sacco's with outstanding performance in the implementation of this principle. This issue also features major events held and partnerships formed during the year 2019. Efforts to professionalize the cooperative career are worth mentioning here. Everyone is affected by cooperatives, but we rarely ask: What really makes a cooperative professional? In the same line, we celebrate leaders whose careers have exemplified professionalism and have been recognized for their outstanding achievements. In governance the year 2019 was marked by formulation of a variety of government and county government policies and regulations. The national government set the pace with the Cooperative Policy of Kenya 2019 which among other things, harmonizes the work of the central government with that of the county governments. The new

policy we hope, will bring harmonized growth and facilitate the exploitation of the different economic opportunities available in the different parts of the country. The new policy also provides for cooperatives to play a major role in economic development of the country especially in the realization of the Agenda Four programs and Vision 2030 as demonstrated in their inclusion in the ownership of the Kenya Mortgage Refinancing company (KMRC). We highlight saccos that are breaking new ground as part of this scheme. In this issue we also highlight the Sacco supervisory report 2018 of Sacco Societies Regulatory Authority (Sasra) as well as key findings of its study on the age and gender composition of deposit-taking Saccos which is the first of its kind in the country. It is hoped that the cooperative societies will apply the findings of the study to develop responsive financial products that meet the needs of their diverse membership. Welcome to the 2019/2020 issue of the Kenya Cooperative Societies Yearbook.

Emma Muli Editor.

Kenya Cooperative Societies Yearbook 2019/2020

The

Notebook

AFRICAN SACCOS LEAD THE WORLD IN GROWTH

African credit unions (Saccos) had the largest increase in membership in 2018 with a 21 per cent jump from 2017, according to a World Council of Credit Unions Statistical Report. Kenya had the largest co-operative movement growth in terms of membership, savings and shares. Other African countries with a strong co-operative sector in the continent were Rwanda, Togo, Ethiopia, Benin and Tanzania. Globally membership in savings and credit cooperative societies stands at more than 274 million with a 9.38 per cent penetration. According to the report, there were 85,400 savings and credit cooperatives globally.

JOINING IBUKA

Safaricom Investment Co-operative has joined the Accelerator Board of the NSE, Ibuka, a program that helps companies to join the Nairobi Securities Exchange (NSE). The Incubator Board involves financial, technical, operational, commercial, strategic, governance, environmental, legal, compliance, outsourcing, capacity building, risk or other service nature. Potential members follow a rigorous evaluation and vetting process. So far, there are 17 members with Safaricom Investment Cooperative Society making it the 18th and the first cooperative to join the NSE.

Kenya Cooperative Societies Yearbook 2019/2020

The firm says its next phase for growth is leveraging the NSE to access liquidity against investment. According to Safaricom Investment Co-operative Society CEO Humphrey Njeru the cooperative has acquired and sold 129 investment projects, including four major housing projects.

GOVERNMENT RECOVERS EMPLOYEES’ REMITTANCES

During the year 2019 alone 112 cases involving 93 employers who had defaulted in remittances of employee contributions to saccos amounting to Shs.4.9 billion shillings were recorded. At the same time, the government recovered Shs 1.3 billion. Among the defaulting employers are universities, county governments and parastatals. The default in remittances has hampered efforts to increase savings. And worse, this non remittance has negatively affected the credit rating of members as they end up being listed with the Credit Reference Bureau. Members are therefore unable to access adequate loans as they are deemed not credit worthy.

SACCO ANTI FRAUD UNIT

Following President Uhuru Kenyatta’s directive, the Sacco Societies Fraud Investigation Unit has been incorporated within the Sacco Societies Regulatory Authority (SASRA). The unit will investigate and prosecute fraud, money laundering and false accounting in the cooperative sector. The President also gave a directive for the establishment of facilities for inter-sacco lending in order to address liquidity challenges faced by saccos.

The Cabinet Secretary, The National Treasury, the Cabinet Secretary, Ministry of Trade Industry and Co-operatives and Governor, Central Bank of Kenya would speed up the process of establishing the Central Liquidity facility which would enable saccos to participate in the National Payment System and allow them to come up with more innovative products for Kenyans.

Kenya Cooperative Societies Yearbook 2019/2020

2019

Events PRESIDENT GRACES USHIRIKA DAY

Uhuru watches Nairobi City from the vantage point of Mwalimu Towers.

President Uhuru Kenyatta was the chief guest at the 2019 Ushirika Day celebrations in Nairobi which coincided with the 25th United International Day of Co-operatives.

Nations

The theme of the celebrations was “Co-ops 4 Decent Work”. The President’s engagements started at Dandora where he opened a factory owned by the New Kenya Cooperative Creameries. He then

Uhuru opens a renovated KCC factory at Dandora, Nairobi

Kenya Cooperative Societies Yearbook 2019/2020

proceeded to Upper Hill to officially open the National Co-operative Housing Union (NACHU) Plaza followed by the official opening of Mwalimu Towers in the same area. Mwalimu Towers is a 17storied office and commercial building with parking space for up to 200 vehicles.

Kenyatta International Convention Centre (KICC) where President Kenyatta addressed the cooperators. He promised farmers that all the KCC factories which had been closed would be reopened.

The climax of Ushirika Day celebrations was at the

Members of Dumisha Sacco observing the 97th International Ushirika Day celebrations.

In Maralal, members of the Dumisha Sacco (above) observed the 97th International Ushirika Day celebrations for the first time since devolution. The event was organized by the County Government of Samburu Department of Trade and Cooperatives. And speaking to the Kenya Cooperative Societies Yearbook, the Sacco CEO, Isaac

Leaburia referred to the event as “historic”.

With some 1000 members Dumisha Sacco society (formerly Samburu Teachers Sacco), has two branches—one in Baragoi and the other in Wamba.

Kenya Cooperative Societies Yearbook 2019/2020

2019

Events

Cabinet Secretary Agriculture, Livestock, Fisheries and Cooperatives, Peter Munya during the launch of the organization.

MEETING TO MAKE COOPERATIVE PROFESSIONALS Kenya Society of Professional Co-operators (KSPC) has unveiled its curriculum to be used to certify cooperative professionals. The key purpose of KSPC is to promote professionalism by offering training and registering those who qualify as professionals. Examinations will be administered by Kenya Accountant and Secretaries National Examination Board (KASNEB). Registered in the year 2017 as a non-profit making organization, the initiative has attracted a good number of supporters both from the movement and academia. Promoting council members include Prof Esther

(Member) Dr. Moses Gweyi (Representing Cooperative University of Kenya) Mr. Daniel Marumbe (Representing Cooperative Alliance of Kenya) Mr. Symon C.J. Mburia (Representing the State Department for Co-operatives) Mr. Francis Kamande (Representing all National Co-operative Federations). Formation of the society followed a recognition that those claiming to be cooperative professionals and consultants have no training or basic understanding of the co-operative philosophy, principles, values and practice and are often responsible for distortions of the co-operative model in Kenya.

Gicheru (Chairperson) Mrs Teresa Mutegi (Vice Chairperson) Richard Nyakenogo (Treasurer) Steven Otieno (Secretary) Dr. Nelson Kuria

Kenya Cooperative Societies Yearbook 2019/2020

Ireland, Malaysia, and Thailand. Discussions at the congress which was opened by the Cabinet Secretary for Industry, Trade and Cooperatives Peter Munya, centered on how financial cooperatives can be used to make an impact at the grassroots. Among those who addressed the meeting was Brian Branch (pictured left), CEO and President of the World Council of Credit Unions (WOCCU), who gave a key note address on "Strengthening National Network Governance Structures”. WOCCU President and CEO, Dr. Brian Branch.

ACCOSCA MEETING IN MOMBASA Over 800 cooperators from around the world gathered in Mombasa in October 2019 for the 20th Savings and Credit Cooperatives Associations (SACCA) Congress with the theme “Embracing Servant Leadership and Inclusivity through Financial Cooperatives”. The Congress was organized by the African Confederation of Cooperatives Savings and Credit Association (ACCOSCA) and is its largest event, bringing together cooperators from all over the world to address key topical issues facing SACCOs. It also explores strategic and innovative techniques for ensuring sustainable cooperative financial Institutions. There were over 30 African Countries in the Congress, with organizations that support Cooperatives from USA, Germany, Canada,

Dr. Branch has undertaken credit union development assignments in many countries including Kenya. He developed programs to update and expand the savings based financial services of credit unions worldwide. ACCOSCA CEO George Ombado spoke on "Cooperative, Diversity and Inclusiveness to accelerate financial inclusion.” Others who addressed the Congress include Dr Gervas Machimu, a senior lecturer at Moshi Cooperative University who spoke on the ability of Saccos to reach the underserved rural communities. The meeting also discussed the challenges faced by Sacco management when considering how to include the youth whose number in movement has grown to over 86 million worldwide. ACCOSCA’s work involves advocacy on gender disparity, supporting regulatory framework, tackling generation gap, encouraging rural financing and promoting best governance practices.

Kenya Cooperative Societies Yearbook 2019/2020

2019

Partnerships WOCCU - VISA LAUNCH PAYMENT TOOL FOR SACCOS Universal Traders, Fortune and Siraji in the WOCCU-VISA payment tool introduction

In June 2019, three Kenyan SACCOs - Universal Traders, Fortune and Siraji joined the Kenya Union of Savings and Credit Cooperatives Ltd (KUSCCO) in Dubai for the introduction of the WOCCU-Visa financial tool targeting Kenyan saccos. WOCCU Vice President Megan O’Donnell said the aim was “to help saccos to have more access to digital financial tools”. They identified text-to-pay capabilities, affordability and a broad network for services as some of the key factors for their product's ultimate success. He argued that while digital financial tools such as M-pesa were available in the Kenya, the products were still too expensive for many Saccos. In response the saccos said for it to be viable, the WOCCU-Visa tool would need to limit transaction charges, provide a way to track transactions and allow for mobile point-of-service sales.

Universal Traders Sacco receiving an award in Machakos. 11

Kenya Cooperative Societies Yearbook 2019/2020

2019

Partnerships USAID ‘CLEAR’ FOR COOPERATIVES improving business performance through capacity building and management and by testing and analyzing positive behaviors resulting from participating in the programme. CLEAR will seek to support twenty-five counties to develop county cooperative policies and legislation as well as domesticate the model county cooperative bill that was adopted by the Council of Governors (COG) in 2016.This will help steer the smooth operations and enhance performance of cooperatives at the county level. CLEAR will also work with youth and women to empower them to create their own business and step into the formal economy by seizing new service oriented cooperative opportunities.

Prof. Kivutha Kibwana who was the keynote speaker.

Global Communities, an international nongovernmental organization working in Kenya, launched the United States Agency for International Development (USAID) Cooperatives Engagement Advocacy and (CLEAR) program in March 2019.

Leadership Research

The programme, co-created alongside USAID’s Local Sustainability Unit, will focus on broadening the use of the cooperative business model and creating a more supportive legislative environment The objectives of the program are to build a stronger, more connected Kenyan cooperative sector by creating enabling environment

through advocacy;

Speaking at the launch, CLEAR Kenya Country Lead, Moses Kanene said: “Cooperatives are an effective model of enhancing market systems and addressing economic empowerment for youth and women.” The keynote speaker, Makueni County Governor Professor Kivutha Kibwana said: “The co-operative movement has been an effective engine for development in Kenya. It cuts across almost all sectors of the economy. I am convinced that the program will strengthen the movement by creating an enabling environment that will generate different economic opportunities that improves livelihoods of Kenyans.”

Kenya Cooperative Societies Yearbook 2019/2020

2019

Research STUDY SHOWS SACCO AUDIENCE A pioneering statistical summary of demographics of deposit taking saccos in Kenya.

The Sacco Societies Regulatory Authority, (SASRA) has published results of its study on age and gender composition of the members of deposit-taking SACCOs (DT- Saccos) in Kenya – the first of its kind in the country. In gathering data, some 152 DT-SACCOs constituting 87% out of 174 that are registered with SASRA were either physically visited or had their data emailed directly to the Authority. The total membership of DT- Saccos was 4.97 million in 2018. Out of these, a total of 4.78 million or 96.2% of the entire membership were natural person members (individuals), and the remaining 3.8% were corporate and institutional (non-natural) person members such as self-help groups (chamas), partnerships and private entities Of the natural members, 60.65% are men, 34.23% are women with 5.12% members who had not stated their gender. This shows that the male gender greatly dominates the membership of DT-SACCOs, an imbalance which may be attributed to the dominance of the male gender in key socio-economic activities.

Gender distribution among natural person memberships.

Kenya Cooperative Societies Yearbook 2019/2020

Age-bracket distribution of members as a percentage of total natural members

Youth within the age-brackets of 18 years to 35 years accounted for 30.86%, ,nearly a third of all

report to generate public policy dialogues and commentaries, particularly among the

members. This demystifies the public perception that SACCO membership has no place for the

practitioners of SACCO business, economic policy think-tanks, as well as researchers.

youth.

The finding that almost a third of the membership

Demographic data and statistics such as income, age, gender and occupation are especially important considerations when developing new products, choosing branch locations, and creating marketing programs that will appeal to an institutions customers’ base.

of SACCOs are below 35 years, provides for a total shift in the national policy trajectory and consciousness, that has for long associated membership in SACCOs with only old people.

It is therefore, essential for the SACCO subsector to embrace the use of such data to develop responsive financial products and services, unique to the specific needs of their diverse membership.

The report also shows that a majority of members within the 18 years to 24 years are members of farmers’-based DT-SACCOs with 58.88% of the total population of the members.

Because it is a baseline study, the Sasra expects the findings and observations contained in the

Distribution of members of age-brackets among the common-bond clusters

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Contact the Editor on: Phone: 0753510762 / 0773991820 / 0721302418 Email: mkyendo@gmail.com

Kenya Cooperative Societies Yearbook 2019/2020

2019

Policies and Regulations CO-OPERATIVE POLICY OF KENYA 2019 Parliament passed the Cooperative Policy of Kenya 2019 which conforms to the 2010 Constitution and defines the roles of the National and County Governments in co-operative development. The policy replaces Sessional Paper No. 6 of 1997 on “Co-operatives in a Liberalized Economic Environment ” that paved the way for the enactment of the Co-operative Societies Act of 1997 which drastically reduced the role of Government in the management of co-operative societies and instead vested on members of cooperative societies the responsibility to oversight the performance of management. The members were not adequately prepared for this role leading to poor performance by the sector and necessitating amendments to the Act in 2004 to provide legal safeguards in instances of mismanagement. The amendment to the act were however not preceded by a policy review. Policy formulation was therefore necessary and the need became more urgent with the devolution of cooperatives development functions in 2013 which was done without specifying the roles of the national and the county governments in the management and

Cabinet Secretary Agriculture, Livestock, Fisheries and Cooperatives, Peter Munya.

supervision of cooperatives. The new policy, therefore, lays ground for the review of the legal and regulatory framework to facilitate the growth and development of co-

Kenya Cooperative Societies Yearbook 2019/2020

operatives. Cabinet Secretary of Agriculture, Livestock, Fisheries and Cooperatives, Peter Munya, says the policy is expected to facilitate the exploitation of the different economic opportunities available in all parts of the country. The policy places cooperatives at the forefront of enhancing agricultural productivity and value addition, provision of decent, affordable housing and

promoting the involvement of youth and women in wealth creation. The following are the key policy issues and the interventions provided:.

Key Policy Issues and Interventions 1) Review of the legal and regulatory framework

Objective: To align the legal and regulatory framework to the Constitution of Kenya 2010 and address the dynamic business environment. Interventions: Review the Co-operative Societies Act, Sacco Societies Act, focusing on areas such as the powers of the commissioner, formulation of county specific legislation and regulations and the establishment of regulatory authorities to oversee various sectors of cooperatives 2) Co-operative production, value addition and marketing Objective: To promote co-operative production, value addition and marketing in order to improve

returns to members. Interventions: Creation of various credit schemes and revolving funds, Public Private Partnerships (PPPs) and Business Process Out-sourcing (BPO), cooperatives to be recognised under Commodity Exchange Programme (COMEX) among others. 3) Co-operative finance and investment Objective: To enhance financial deepening investments through co-operatives.

and

Interventions: Encourage co-operatives to participate in government securities, introduce Islamic banking in cooperatives, establish cooperative development fund and provide incentives to housing cooperatives to participate in provision

Kenya Cooperative Societies Yearbook 2019/2020

of decent affordable houses.

of alternative dispute resolution mechanisms in co-operatives.

4) Co-operative Movement Structure Objective: To enhance efficiency in regulation and coordination of co-operative activities Intervention: Restructure CAK to respond to the needs of the new structure; set up CAK County chapters, promote cooperative federations in all value chains, streamline registration to reflect cooperative main activity, prohibit registrations of organizations as both cooperatives and companies among others.

5) Co-operative governance and enforcement Objective: Establish institutional and regulatory framework for effective governance of cooperatives at the four tier levels, which provides for self-regulatory mechanism within the sector Interventions: Strengthen regulatory institutions, develop regulations that guide the graduated levels of growth and development of co-operative societies; and reform the Co-operative Tribunal to enhance access and timely dispensation of justice to co-operators; and promote application

6) Co-operative education, training and research Objective: To provide reliable data and information and to empower co-operative officials and members with relevant skills and competences Interventions: Establish linkages with all institutions of higher learning offering cooperative training, development of a uniform co-operative curriculum for use in learning institutions and develop mechanism to fund research and development in the sector among others. 7) Information Communication Technology in Co-operatives Objective: To promote adoption of ICT n Co-operative. Interventions: Develop guidelines to encourage use and sharing of ICT in cooperatives.

Kenya Cooperative Societies Yearbook 2019/2020

2019

Policies and Regulations COFFEE REVITALIZATION ACTION PLAN: COFFEE CHERRY ADVANCE REVOLVING FUND In 2019,the State Department for Co-operatives (SDC) in collaboration with coffee sub-sector implementation committee (CSIC) and other key coffee stakeholders, implemented various interventions in the coffee reform agenda which are based on eight pillars along the coffee value chain. The activities have been harmonized with the coffee taskforce report and the Coffee Revitalization Action Plan (CRAP). The cherry advance revolving fund is a central part of this plan. Below are the details:

In 2019 the government established the cherry advance revolving fund as part of wide-ranging coffee revitalization programs The purpose of the fund is to provide affordable, sustainable and accessible cherry advance to smallholder coffee growers. The money for the fund will be sourced from parliamentary allocation in the national budget, money raised from growers as a result of the establishment of the Fund, for example interests on loans and penalties as well as grants, donations, or other gifts made to the Fund and monies from any other source approved by the Cabinet Secretary. Any Kenyan who is a member of a cooperative involved in coffee or is a small coffee farmer is expected to benefit from the Fund: Other coffee revitalization measures include the development of a tool to collect data on coffee cooperatives and small scale farmers. This was

completed in 2019. Pilot testing of the tool was done in 24 coffee societies in Nyeri county, 22 societies in Kiambu, 17 societies in Kirinyaga and 40 societies in Meru counties. Another intervention program is the coffee subsector subsidy program aimed at enhancing primary coffee processing. This involves digitization and automation of coffee cooperatives as well as modernization and rehabilitation of coffee factories .In digitization the government has developed and disseminated need assessment tools in coffee growing counties. The coffee modernization program is expected to rehabilitate about 500 coffee factories. Other measures include enhancement of capacity of institutions to offer research, advisory and regulatory services with the objective of strengthening of governance structures in cooperatives. To achieve this the government plans to conduct performance and forensic audits in all coffee cooperatives. 19

Kenya Cooperative Societies Yearbook 2019/2020

2019

Policies and Regulations NEW RULES FOR MATATU COOPERATIVES In 2019 the Government implemented a new cooperative model for the matatu business which will reflect the particular needs of the transport industry.

Under the new model matatus are registered as Transport Cooperatives (trans-coop) with the core activity being fleet management.

The new model reclassifies matatu cooperatives, formerly matatu saccos as Transport Cooperatives, taking into account the fact that matatus are in the business of transport

The new model is expected to also enhance transparent accounting of any moneys received in a transport cooperative society. To effectively perform these functions, transport societies that want to continue with current Sacco business will

management and not in saving money and giving credit as is the case with Saccos.

be required to delink their savings and credit business from their core transport business.

Kenya Cooperative Societies Yearbook 2019/2020

This change created the need for new bylaws which the State Department of Cooperatives has already developed to be adopted by all transport cooperatives. The by-laws include regulations on the running of matatu business to ensure self-regulation and as well adherence to agreed code of conduct . Other regulations also describe how matatus will collaborate with other relevant organs such as the police and licensing bodies in enhancing selfregulation.

with the name "transport co-operative (‘transcoop’) or such other agreed acronym for PSV Transport Co-operative Society. Each society will also be required to develop an enforceable code of conduct while all the elected leaders will go through an intensive training on their expected roles. Transcoop societies are free to create unions and federated structures for advocacy, lobbying and representation on the sub county, county and national levels.

The bylaws require that all matatus be branded

ENFORCING ANTI-CORRUPTION LAWS IN CO-OPS The Ethics and Anticorruption Commission

that require collection of evidence and recording

(EACC) will now help the State Department of

of statements as well as preparing cases ready

Cooperatives (SDC) to enforce anti corruption laws.

for forwarding to the Director of Public Prosecutions to commence court proceedings.

Under the MOU signed between the two in 2019, the EACC will support the prosecution of cases on corruption and economic crimes in the

The MOU also empowers EACC to contact lifestyle audits and integrity testing including declaration of wealth of cooperative officers.

cooperative sector using its wider scope in application of various laws not limited to cooperative law to prosecute offending

EACC will also assist in capacity building of cooperative society staff in detection of fraud and corruption.

cooperative officials.

Following the MOU, the Ethics Commission for Cooperative Societies, a section of the SDC will

This will be particularly useful where the Cooperative Societies Act has been limiting the SDC officers who were unable to investigate mismanagement of companies registered as subsidiaries of cooperatives.

be upgraded to a semi-autonomous body.

EACC has the capacity for deeper investigations

Kenya Cooperative Societies Yearbook 2019/2020

2019

Impact of Cooperatives COOP IMPACT 2019-2020 Kenya ranks number seven in the world and number one in Africa in cooperative development. By 2019, there were about 23,000 registered cooperatives with total membership of 14 million, cutting across almost all sectors of the Kenyan economy. These co-operatives had mobilized savings to more than Shs730 billion, advanced over Shs700 billion as loans and controlled assets worth more the Shs1 trillion. It is estimated that 63% of Kenya’s population participates directly or indirectly in co-operatives contributing about 31% of the total Gross Domestic Product (GDP). The social and economic impact of cooperatives cannot be under-rated. Being community-owned enterprises Cooperatives fill gaps that private businesses ignore such as financing education, health, rural housing and funeral expenses.

Kenya Cooperative Societies Yearbook 2019/2020

The benefits that have accrued to Kenyans through co-operative societies include employment and wealth creation. Other than being engaged in the traditional areas of agricultural production, processing and marketing, the strength of co-operatives can now be felt in finance, transport, real estate and commercial activities.

sector, whose outreach spreads to touts stationed along the routes, car wash attendants, mechanics, food providers and insurance agents. Matatu saccos are helping in ensuring safety on Kenyan roads by among other things retraining their drivers and ensuring they stay fit to drive on the busy Kenyan roads.

AGRICULTURE-BASED COOPERATIVES TRANSPORT COOPERATIVES

The matatus together with mini-buses and buses provide jobs to nearly 500,000 people directly and indirectly.

Co-operatives are at the heart of rural economies in the country where small holder agriculture is the mainstay. Cash crop farming especially coffee, sugarcane, rice, macadamia, cashew nuts and cotton would not be practical and profitable without cooperative societies. Essential services offered by the societies include financial, farm inputs supply, and storage and marketing of produce.

According to a Government report, the importance of the public transport in Kenya cannot be underrated. The ripple effect of the sector impacts positively on others as evidenced by the matatu

By the end of 2019 there were over 5600 agrobased co-operative societies in Kenya. These Cooperatives are mainly involved in coffee, dairy, bananas, livestock, cereals and cotton production

In 2019, there were more than 37,000 matatus on Kenyan roads. The matatus, most of which are registered as cooperatives, account for 80 per cent of the public transport system with an estimated annual turnover of Shs73 billion.

Members of a farmers' cooperative drying coffee in Nyeri. 24

Kenya Cooperative Societies Yearbook 2019/2020

and marketing. They had a combined turnover of Kshs.14 billion and an asset base of Shs.481billion in 2017. Cooperative unions provide services that include; bulk sourcing and distribution of farm inputs, storage, pooled transport, book-keeping, marketing. Dairy Cooperatives such as the Meru Dairy Cooperative Union (featured in opposite page) has made great impact on he lives of dairy farmers. According to estimates, at least five per cent of the national Gross Domestic Product (GDP) was generated from milk.

HOUSING COOPERATIVES With the rapid growth of towns and cities there is a pressing need for urban dwellers to have access to reasonable living conditions at an affordable cost. The same need is felt by many rural dwellers who are increasingly changing from traditional to modern housing. Co-operatives have come in to play a crucial role in the provision of finance for construction of decent and affordable shelter. By 2019, there were some 1,980 housing co-operatives with an asset base of Shs31 billion.

The diaspora saccos have also mobilized funds for housing for their members based abroad. USA Diaspora Sacco is among the leading with investments in housing. One of its big housing projects is Fadhili Estate on Kangundo road, occupying 12 acres. The estate comprise of 240 home units. The home owners, most of whom live in the USA, Australia, Canada, United Kingdom and

Apartments built by a cooperative in Nairobi.

Botswana. Diaspora Cooperatives involved in housing have increased rapidly. According to Fredrick Njuki, the CEO of Kenya USA Diaspora Sacco, out of the more than Sh138 billion sent back home by Kenyans in the diaspora in the first six months of 2018, between 60 and 70 per cent went into real estate. The co-operative movement is expected to deliver 25% of the annual housing demand in the country. Key players in the sector in 2019 include Safaricom Investment Cooperative that unveiled the Zaria Village in September 2019, a gated family-oriented real estate project located in Kiambu County, and occupies 124 acres of land, subdivided into 331 plots, each ¼ of an acre. The project targets the middle and upper-middle-income earners.

Kenya Cooperative Societies Yearbook 2019/2020

2019

Impact of Cooperatives THE RISE OF DIASPORA COOPERATIVES

By 2019, there were 16 Diaspora Cooperatives registered in Kenya born out of circumstances that Kenyans in the diaspora encounter such as stringent financial requirements that banks impose which are not only cost prohibitive but make qualifications difficult, as well as the need to have reliable means of investing money back home. Among them is the Kenya USA Diaspora Sacco that promotes savings among Kenyans in the USA so that they can have a reliable and organized way to invest, access to affordable credit, build

businesses or meet personal needs. Another strong diaspora sacco is the Kenya North America Diaspora Savings and Credit Cooperative Society Ltd (K-NADS), with over 1000 members. It was founded by a group of Kenyan women in the USA to empower women in the diaspora financially through credible investments and access to credit.

Kenya Cooperative Societies Yearbook 2019/2020

2019

Impact of Cooperatives Meru Dairy: Creating a Better World for Dairy Farmers Meru Dairy Co-operative Union based in Meru County has made great impact on the lives of farmers. It has 42 affiliated cooperative societies and a number of farmer groups spread out in Meru County and environs.

Services comprising of trained Artificial Insemination (AI) service providers and veterinary personnel.

The Union operates a dairy plant with a processing

The Union ensures adoption of better and improved farming technologies through organized

capacity of 300,000 litres per day producing the popular Mount Kenya milk brand. It has a wellestablished department that focuses on Extension

It also has a breeding structure and distributes bull semen from the national bull stud (KAGRC).

training programs, including exposure visits for their members to enhance on-farm productivity.

Kenya Cooperative Societies Yearbook 2019/2020

2019

Impact of Cooperatives SAVINGS AND CREDIT COOPERATIVE SOCIETIES Savings and Credit Cooperative Societies (SACCOS) have demonstrated their ability to meet financial needs of a variety of Kenyans –men and women, young and old as well as rich and poor – by encouraging savings and granting loans to the members. By 2019 Sacco sector controlled savings of Shs.732 billion which does to the community directly supports community development efforts to access social services, stimulate growth of businesses, improve members' income as well as living standards and create employment opportunities

of Shs 67 billion in 2016 and accounted for 20.5% of the total lending by the sector. Wholesale and retail business activities received over Shs 63 billion while transport and foreign trade received Shs 4 Billion

Education sector received 12% of the total credit financing, while the agriculture sector received 6.6% of the total credit financing for the five years ending December, 2016, which was represented by Shs 39 billion and Kshs 21 Billion respectively

The sacco sector employs half a million people and, by

Out of the Shs21 billion that financed agriculture, crop production received the highest proportion amounting to Shs 14.5 billion which was 59% of the total credit

2017, contributed 5.72% of Kenya’s nominal GDP. According to a survey by Sasra, saccos are the largest

financing to the agricultural sector by SACCOs. The financing towards animal production activities distantly

players in the real-estate market, filling a critical housing gap by funding land purchases and construction of residential houses. By 2016, credit finances to this sector amounted to Shs110 billion financing either a purchase of parcels of land (or plots), or constructions with a small amount being used for land acquisition services such as valuation

followed with just Shs 4.5 billion, while agricultural supporting activities received Shs 2.5 billion in credit finance from the saccos.

The second highest beneficiary of credit financing from the saccor sector was the trade which received a total

And, more importantly, saccos are helping to formalize the economy. Indeed, saccos such as Boresha in Baringo County and Solution in Meru County have concentrated their efforts in expanding their financial services to reach remote communities that do not have access to banking services.

Kenya Cooperative Societies Yearbook 2019/2020

2019

Impact of Cooperatives SOLUTION SACCO: EXPANDING ACCESS TO FINANCIAL SERVICES Solution Sacco Society Chairperson Mr. Peter Igweta addressing members.

functions including online loans applications as well as online payment of bills. Members can download the App from their phone play stores and apply for a loan online without waiting to meet guarantors physically which, according to the Sacco, has been a hindrance arising from delocalization. In 2019, the Sacco also upgraded all its ATMs and successfully replaced ATM cards with superior Verve Cards.

In 2019, Meru-based Solutions Sacco achieved a major goal when it completed installation of Wide Area Network (WAN) which could effectively open its services to members and uses over a wide rural area.. The installation has enabled the Sacco to expand its branches and its coverage using mobile banking technology using apps, agents and USSD that will enable its members access services from any part of the country. The app can be applied for various

Another milestone the Sacco achieved was the doubling of the total assets within the last five years, increasing from Shs2.5 billion in 2013 to Shs 5.2 billion in 2019. Total assets increased from Shs4.4 billion to Shs5.2 billion, representing 15 per cent increase while branch network currently stands at 12 while active membership grew from 14,030 in 2018 to 19,078 in 2019, an increase of 25 per cent. Loans and advances to members increased by 17 per cent from Shs3.4 billion in 2018 to Shs4 billion in 2019.

• Share

and deposits… Shs9.3 billion • Total loans disbursed… Shs 10 billion • Membership… 81,227

Kenya Cooperative Societies Yearbook 2019/2020

SASRA DT-SACCO REPORT Year of Growth for Deposit Taking Saccos For the second year running, the total deposits mobilized by the DT-SACCOs grew at 12%

DT-SACCOs continue to play a big role in deepening the provision of formal financial services to many households, thanks to improved management, supervision and growing interest from Kenyans. Here is an abstract of the 2018 Sasra Report of the performance of the Deposit-taking Saccos.

reaching Shs 341.91 billion in 2018 from Shs 305.3 billion recorded in 2017. A total of 176 DT-SACCOs were licensed to operate and undertake deposit-taking Sacco business in Kenya at the commencement of the year 2018. However, two DT-SACCOs, had their respective deposit-taking licenses revoked in 2018, for failing to maintain and meet the minimum statutory and compliance requirements. During the same year, the Authority processed and

Kenya Cooperative Societies Yearbook 2019/2020

issued one new deposit-taking license to Kencream Sacco Society Ltd, with authorization to commence operations in January 2019. bringing the total number of DT-SACCOs with valid deposit -taking businesses for the period commencing January, 2019 to 175 institutions Financial Soundness and Stability There was an overall resilience and stability in the deposit-taking SACCO segment in 2018 as seen by increased capitalization which grew to Shs 74.37 billion in 2018 from Shs 64.25 billion in 2017. In terms of individual performance, 162 DT-SACCOs were able to meet and maintain the prescribed minimum ratio, with only 12 DT-SACCOs failing to meet the core capital requirement. Additionally, 144 DT-SACCOs met and maintained the core

capital to total assets ratio, with only 30 DTSACCOs failing to meet the threshold. The external borrowing ratio has also been maintained within the prescribed range of not more than 25% of the total assets; with the aggregate ratio dropping from 4.83% recorded in 2017 to 4.11% in 2018. These shows that DT-SACCOs are generally reducing their reliance on external borrowing to fund their assets.. A massive 136 DTSACCOs reporting a respectable external borrowing ratio of less than 10%. Governance and management The Authority has been promoting a gender segregated reporting framework for DT-SACCOs which is critical for policy formulation, especially at their governance and management levels. Out of

Kenya Cooperative Societies Yearbook 2019/2020

the four critical organs of governance and management of DT-SACCOs, the majority of

presence in 44 counties., DT-SACCOs continue to play a big role in deepening the provision of formal

positions are held by the male gender with 83.25% of the directors being male and 16.75% being female; 77.78% of the members of the Supervisory Committee being male and 22.22% being female; and 77.01% of the Chief Executive Officers being male and only 22.99% being female.

financial services to many household economies. The continued partnership with commercial banks and telecommunications service providers to offer to their members ATM services; cheques services; mobile money wallets services; agency banking services among others has also set DT-SACCOs apart as an important cog in taking financial services closer to the people.

The composition of the senior management teams in DT-SACCOs was the most constitutionally gender compliant, but with the male gender still dominating at 66.41% while the female senior managers in DT-SACCOs constituted 33.59%. Financial inclusion and access The 174 DT-SACCOs served over 3.5 Million individual persons who had active accounts during the year 2018. And with a distributive physical

Kenya Cooperative Societies Yearbook 2019/2020

THEME ACTIVITIES

The Seventh Co-op Principle

CONCERN FOR COMMUNITY One of the ways cooperatives are impacting

policies approved by their members.’

communities is through one of the seven cooperative principles, Concern for

It is a principle developed by ICA after long

Community. This important principle reads: “Co -operatives work for the sustainable development of their communities through

Staff of Simba Chai Sacco in Kericho donating mattresses to Bethel Children’s Home.

investigation of what co-operators around the world believed were the main values informing the movement. Kenyan cooperators were honored to be among the 10,000 people

around the world where questions concerning the relationships between co-operatives and communities were frequently raised, notably by young people and women which led to the development of the principle. The principle is regarded as the co-operative spirit, which infuses co-operative organizational cultures. This principle guides the long-standing and ongoing business decisions to make donations and offer support to the communities served by cooperatives. Here we feature cooperatives that did outstanding work in the period under review.

Kenya Cooperative Societies Yearbook 2019/2020

2019

Theme Activities BORESHA COMMUNITY FOUNDATION SETS PACE Boresha Sacco in Baringg County established Boresha Community Foundation (BCF) in 2012 to take up its growing social responsibility programmes. Since then the BCF has initiated various, programmes. Its partners include private and non-governmental organisations. The following are the key areas of involvement and the programmes it has undertaken.



Agriculture and Agribusiness:

BCF has invested over Sh1.5 million in training and motivating local farmers to improve their farm productivity. Key activities for the last three years have focused on the maize farming in the Marigat Irrigation Scheme where it partners with Kenya Seed Company (KSC) to fund farmer groups while KSC provides seeds. BCF has helped create jobs and improve market, financial and technology access for small and medium-sized farmers. 

Environment:

In the past three years the BCF in collaboration

Education, and leadership development:

This programme helps needy students in Baringo and neighboring counties to continue their secondary school and college education. Together with its partners, BCF, plans to increase the number of students accessing funding. Planting trees to increase forest cover and to preserve indigenous trees.

Kenya Cooperative Societies Yearbook 2019/2020



Donating food to school children.

Health:

BCF recognizes the fact that healthy people are the foundation of healthy economies. It therefore supports various public heath activities and good feeding programmes for those living with HIV/Aids in Baringo county. BCF continues to increase access to comprehensive health financing and to champion private sector-led, affordable, highquality health services as well as to promote and advance awareness of good health and education among children.

with the community and schools has planted over 10,000 seedlings of both indigenous and exotic trees. The aim is to expand forest cover, encourage conservation of indigenous trees and improve water security. BCF also promotes the use of renewable energy and energy-efficient technologies.

It supports health and nutrition programmes in schools, orphanages and rehabilitation centres. It also supports family counseling, sex education, and sporting centers.



and economic growth both in the area and in the communities of the neighboring counties of Elgeyo -Marakwet and Laikipia. Boresha Sacco’s efforts to encourage peace have focused on providing financial services to encourage the communities to engage in alternative occupations and reduce over reliance on livestock which is the major source of conflicts and raids.

Entrepreneurship and Innovation:

The programme dubbed Boresha Vijana supports young entrepreneurs and innovators with mentorship and business training. The aim is to stimulate job creation and economic growth. .BCF plans to upscale its services to include development and use of technology. 

Financial Inclusion and Literacy:

BCF through Boresha Sacco continues to improve incomes of households by connecting women and youth to financial services, expert financial literacy training, capacity building and support. Over the years, Boresha Sacco has invested substantial resources in its programmes targeted towards expanding access to financial services at the grassroots. So far, more than 70,000 adults have gained financial literacy. .



Peace Initiatives:

Cattle rustling in Baringo East and Tiaty constituencies poses a major challenge to peace

Boresha Sacco opened its first Sacco branch In Chemolingot in the heart of Tiaty Constituency— the first financial institution to venture into this region. The branch since then has been able to organize the communities for profitable economic activities by opening access to financial services and encouraging savings culture. The programme has made major impact on peace initiatives initiated by the government.

Kenya Cooperative Societies Yearbook 2019/2020

2019

Theme Activities

IMARIKA FOUNDATION Imarika Sacco in Kilifi County, through its foundation—Imarika Foundation–focuses its community concern activities on five pillars: education, health, environment, agribusiness and disaster management. It however, puts greater emphasis on the most pressing community needs such as health and education. According to the

(Above) Beneficiaries of Imarika Foundation scholarships alongside the Foundation Board during the Mentorship Program. (Below) Chairman Mr. Ndoro, Director Sharifu and Executive Director Mr. Angore handing over donations to victims of the Kadzuhoni Displacement in Malindi.

Kenya Cooperative Societies Yearbook 2019/2020

PROGRAMS FOR THE YEAR 2019 The programs carried out through January to September 2019, are shown in the table below. To maximize on the resources, the Foundation has adopted a partnership strategy where they join efforts together with other like minded organizations to carry out the programs. The partners include Tandaza Foundation, Ahadi Kenya Trust and Mombasa Eye Hospital with their total contribution amounting to Shs3,370,000. Imarika Sacco grants to the Foundation in 2019 amounted to Shs 7 million. (Left) Director Jumbe helping a pupil to put on shoes during an anti jigger campaigns. (Below) Director Dzombo treating a pupil infested with jiggers.

Foundation, the objective is to focus on programs that create bigger impact on the community. In 2019, the Foundation spent a total of Shs9,144,120 on education programmes (scholarship and mentorship) and health programmes (anti jigger campaign, purchase of drugs, and Beyond Zero campaign for women health and eye camps). S/NO Activity

Date/Month

Partner

Venue

Cost (KSH)

Education/Scholarship

Jan/May/Sep

834,019

Education/Mentorship

April

CDA Hall - Kilifi

169,410

Health programs in schools. Purchase of drugs

April

Health clubs

Kaloleni/Ganze

393,205

Anti-jigger campaign

May

Tandaza Foundation/Ahadi Kenya trust/Pwani FM

Burani primary school Kwale

387,205

Sustainability plan

March

Maandani prim

Maandani

37,076

Beyond Zero campaign

March

Ahadi Trust/Kenyatta Foundation

Nairobi

309,529

Eye camps

June-August

Mombasa Eye Hospital/ Tangazoletu

Kilifi/Magarini/Mariakani/ Mtwapa/Bamba

2,024,151

Donations

(Jan-Sept)

134,525

Scholarship program -2020

Jan

SUBTOTAL

1,485,000 5,774,120

Kenya Cooperative Societies Yearbook 2019/2020

2019

Front Runners KMRC: 11 SACCOS TO SPEARHEAD AGENDA 4 Eleven Saccos are among the financial institutions to

of 14 per cent over a repayment period of six years

spearhead the Government long term, low interest and low cost housing program under Agenda Four. The

would require a borrower to repay a monthly amount of over Shs70,000 and have a monthly income of over Sh

saccos will lead other cooperatives as members of the Kenya Mortgage Refinancing Corporation (KMRC) in

100,000 for a financial institution to underwrite the loan. This is a tall order for millions of households in a country

the race to provide about 25 percent of the targeted 500,000 housing units expected from the movement as envisioned by the housing pillar of President Uhuru Kenyatta’s Big Four Agenda.

where only three per cent of salaried workers earn more than Sh100,000 per month.

The non-deposit taking Kenya Mortgage Refinance Corporation, an initiative of National Treasury and the World Bank is 80% owned by commercial banks and savings cooperatives, and the rest is held by the government. KMRC already has a $250 million loan from the World Bank, and another $100.51 million from the African Development Bank to kick off mortgage refinancing. ROLE OF SACCOS The saccos will provide long term, low interest mortgage to low income earners. The length of loan repayment is a factor that is often overlooked but can make a significant difference in affordability, much more than cutting interest rates. For instance, taking a Sh 3 million loan at an interest rate

KMRC is to help the many would-be homeowners who struggle to secure a mortgage but are locked out due to their low earnings. President Kenyatta wants KMRC to increase the number of mortgages from the current 26,000. to over 60,000 by 2022 by lowering the cost of mortgages. The 11 trail blazing Sacco's injected shareholding worth Shs10 million each into KMRC. Members of the Saccos will access cheap mortgages through their Saccos which will get financing from KMRC for on lending. Here we feature two of the 11 Saccos—Kericho-based Imarisha Sacco and Kiflifi-based Imarika Sacco.

Kenya Cooperative Societies Yearbook 2019/2020

2019

Front Runners IMARISHA SACCO: BREAKING NEW GROUND Based in Kericho County, Imarisha Sacco society is one of the 11 Cooperatives set to offer mortgages to its members under the Kenya Mortgage Refinancing Corporation (KMRC) scheme. KMRC will enable the cooperative to provide long term low interest mortgages to its growing number of

The society has nine Fosa branches spread across six counties – Kericho town, (the head office) Bureti (Kericho County) Bomet, Muloti, Ndanai (Bomet County) , Keringet (Nakuru Conty), Awasi (Kisumu County), Nandi Hills (Nandi County), Eldoret (Uasin Gishu County) and a marketing outlet in Narok

members currently standing at 81,227.

town which it plans to upgrade to full branch level.

Imarisha Sacco Chairman, Mathew Ruto addressing members during an AGM

Kenya Cooperative Societies Yearbook 2019/2020

Serving a member at a branch.

And it has plans to open additional marketing

people, farmers, private institutions, chamas and

outlets in Nakuru, Nairobi, Sondu and Kitale.

registered groups.

The Society has already invested in ICT enhancement facilities to ease its operations. The facilities include, rolling out the document management system to branch level, M-Imarisha enhancement, online registration of new members and hosting loan forms online.

The Society has registered steady growth through the years. In 2019 member shares and deposits rose to Shs. 9,312,875,238 up from Sh. 7,739,216,067 in 2018 – 20% growth rate while loans disbursed reached Shs.10,039,027,872 rising from Shs. 8,554,342,557 in 2018.

Imarisha Saco is focusing its efforts on enhancing service delivery and growing its membership

Top of the areas of growth include the micro-credit which grew to Shs. 386,102,659 in 2019, up from

through a variety of activities which include installing an interactive tellermachine at Bomet FOSA branch and achieving ISO certification

Shs. 244,227,880 in 2018.

The society was registered in 1978 and is now rated among the top performers in the country. While its initial membership was teachers, it has since opened up its doors to include the general public – government employees, NGOs, business

It has loan products targeted at farmers and the business community among others.

Kenya Cooperative Societies Yearbook 2019/2020

2019

Front Runners

Inside the banking hall of Ukunda Branch of Imarika Sacco

IMARIKA INVESTS IN SCHEME TO EXPAND MORTGAGE ACCESS FOR MEMBERS Kilifi-based Imarika Sacco is among cooperatives that have boosted opportunities for members to get improved housing when it became one of the 11

Imarika sacco was registered in 1974 with the core objective of providing a savings avenue to members and advancing loans to them at an

that have invested in the Kenya Mortgage Refinancing Company (KMRC), a joint initiative between the Kenya Government and the World Bank to finance affordable housing in 2019.

affordable rate of interest. In 1998 the Sacco opened its common bond and admitted other categories of membership. It has since registered steady growth with membership increasing to 108,998 members served from seven branches in Kilifi (Head Quarters),Malindi, Mtwapa, Kaloleni, Garsen, Ukunda and at Bamba in Ganze.

Through KMRC, the sacco is to get funding to finance mortgages to members up to Shs3.5 million for repayment periods ranging from 10 to 15 years.

The main activities of Imarika Sacco are:

Kenya Cooperative Societies Yearbook 2019/2020

loan as guarantee is by 15 group members. The Sacco is now focusing on further increasing membership using improved marketing strategies with Garissa County targeted as a major source of new members. In 2019 the Sacco recorded an all round exceptional performance. The total revenue increased to Shs1.46 billion from Shs1.36 billion in 2018. At the same time total assets rose from Sh7.6 billion to Shs8.6 billion while member deposits

Renson Ndoro, Chairman.

BOSA,FOSA and MSCA. BOSA is for all members operating through check off system while FOSA includes business people operating through standing orders. MSCA caters for group members of between 10-30 registered with the department of social services and operating through the group accounts.

increased from Shs5.24 billion in 2018 to Shs5.88 billion in 2019. Loans to members increased from Shs6.9 billion in 2018 to Shs7.4 billion in 2019. Interest on member deposits also recorded an increase from Shs453 million in 2018 to 530 million an increase of 16 per cent. With Imarika debit card members can access their money anywhere through Co-op Bank ATMs or any Visa point. These are in addition to M-banking/ Spotcash which give members access to their accounts anytime, anywhere.

The saccos wide range of products is designed to meet the needs of its diverse membership. spread across various counties and the diaspora. Among the products is Imarika Vijana Loan through which youth between 18-34 years can get loans to build their businesses together or individually. The youth also have access to business support from the sacco to grow their businesses. Another product that targets non salaried members is the MSCA, a weekly saving made by every member of a group with the aim of acquiring a loan. The total premiums contributed after at least 10 weeks determines the amount of loan the member qualifies. No collateral is required for the

Daniel S.G. Masha, CEO , Imarika Sacco.

Kenya Cooperative Societies Yearbook 2019/2020

2019

Personalities PERSONALITIES OF THE YEAR The Cooperative movement in Kenya is acclaimed as among the most successful in Africa and the seventh largest in the world. Behind this success are men and women of integrity, passion and vision. Men and women who, because of commitment to improving living standards of cooperative members and their communities, made sacrifices and worked with tenacity to build cooperative enterprises that have benefited their members and the country at large. These are men and women who started off small fledgling cooperatives with meager monthly contributions, and through determination and prudent management, built the large co-operative organizations that we see today.

the societies they lead. It is also designed to highlight the challenges they have had to overcome along the way and the management styles they adopted. By telling their stories, the Kenya Cooperative Societies Yearbook hopes to inspire and encourage learning from their successes. In this issue of the Yearbook, we feature three great leaders of the cooperative movement: Dr. Stanley Kyelenzi of Kwetu Sacco Society, Dr. Moses Chebor and Dr. Henry Limo both of Boresha Sacco Society.

They conceived and implemented innovative ideas and policies taking into account the cooperative model which balances the need to be profitable with the needs of their members and the broader interests of the community. This section is designed to recognize these great men and women, highlighting their philosophies and the contribution they made in the success of

Kenya Cooperative Societies Yearbook 2019/2020

2019

Personalities FROM ‘COLLAPSE’ TO AWARD WINNER REBUILDING KWETU SACCO SOCIETY

ALK to Dr. Stanley Kyelenzi, the CEO of the Kwetu Sacco Society, for a few

minutes and you will realize the power of confident enthusiasm. “I can walk tall. And I don’t panic when I hear the phone ringing,” he says as he narrates to me the reason for his confidence and sense of freedom. Dr. Kyelenzi is responsible for the dramatic turnaround of Kwetu sacco – certainly the most dramatic in the Kenyan cooperative sector. Registered in 1967 as Masaku Teachers Sacco Society, the Machakos town-based Kwetu Sacco had a noble vision: to bring together teachers who would mobilize their funds in form Dr. Stanley Kyelenzi, CEO of Kwetu Sacco Society.

‘The darkest night came in 2007 when teachers could not be paid both their salaries and 2016 dividends.

’

– Dr. Kyelenzi

of savings from which they would get low interest loans for their economic empowerment. From as few as 120 members at inception, the society grew to become one of top Sacco’s in the country and certainly the largest in the Lower Eastern region. Then in 2007, the giant Sacco came tumbling down like the proverbial domino. Teachers woke

Kenya Cooperative Societies Yearbook 2019/2020

up to empty bank accounts. Dr. Kyelenzi explains how this came about: The

was. That was when the bitter truth was revealed to us– the Sacco was in a terrible shape! The

teachers could not be paid both their salaries

overdrafts facility had been mismanaged. Simply put, the Sacco was in the red.

and 2006 dividends because of mismanagement. Their salaries had been

“Luckily I eventually managed to convince the bank after long discussions that it was in the

swallowed up by the heavy debts that the Sacco

interest of all parties to keep the Sacco going. As

had accumulated over the years. And banks

a result, they agreed to release Shs3 million to

were not willing to give any more over drafts. To

satisfy the teachers who had vowed not to leave

make matters worse the Teachers Service

the Sacco offices without their salaries and they

commission, TSC, was threatening to stop

promised to release a further Shs83 million within

remitting teachers’ salaries through the Sacco.

a week.”

Amidst the chaos and disenchantment of teachers, Dr. Kyelenzi found himself in the thick of frightening drama. He was the only senior staff member in the office – in deed, others fled never

Dr.Kyelenzi was then the Deputy Manager without the power to do much. A requirement by the bank before releasing the Shs83 million was that a substantive CEO be quickly appointed

to return. He had to do something quickly. And he swung into action. “With a group of teachers, we

with new bank signatories. And that’s how Dr. Kyelenzi found himself installed as the CEO by

walked to the bank to establish what the matter

the ministry of cooperative officials working

darkest night came in November 2007, when

Kwetu Sacco Chairman Mr Julius Nzyoka (left) and CEO Dr. Stanley Kyelenzi (centre) receiving an award.

Kenya Cooperative Societies Yearbook 2019/2020

In Mandarin Oriental, Marrakesh, Morocco during an award presentation ceremony for the most important business award in the world, THE BIZZ AMEA

together with the bank. It was now officially upon him and the new management led by the new

suspended all loans, except emergencies, for four months. From then on, loan application

Chairman Julius Nzioka to rebuild the Sacco.

forms were to be admitted only when funds were

“The first thing I did was to ensure that the

available. The idea was to avoid accumulation of pending loan applications which gave an impression of inability to give loans,” he explains.

teachers’ salaries were safe. This I did by consolidating the overdraft in the back office, where it actually should have been in the first

instance, to avoid the overdrafts swallowing up members’ salaries. “Next was to take measures to rebuild the Sacco liquidity without resorting to bank loans,” Dr. Kyelenzi recalls. The measures included increased efforts to attract fixed deposits while at the same time encouraging deposits by table bankers. “We also

This move was however, not well received and

teachers started pulling out of the Sacco in large numbers. The situation was not helped by the influx of other saccos fighting to get a piece of the membership of the Kwetu Sacco with promises of high dividends. Withdrawing members demanded for refunds through the cooperative tribunal. Something had to be done quickly to stem the outflow of members and funds. Dr. Kyelenzi

Kenya Cooperative Societies Yearbook 2019/2020

remembers: “We agreed with cooperative tribunal on a

Kyelenzi praise and recognition from around the world. In November 2010 he was awarded the

schedule for refunds and managed to reduce litigations and funds outflow. This helped slow

International Gold Trophy in Rome. In 2011, he

what would have become an exodus of members.

Sacco as a role model in Africa. Then in 2016, he was awarded a PhD degree by the

“We also decided to encourage new membership with a newly introduced Karibu loan. It was a loan given to any new member with

received another award which recognized the

Commonwealth University and a Masters Class in Leadership and management by the London Graduate School.

few conditions attached to it. We even recruited and encouraged chamas to use our microcredit

“As the CEO, I had to choose to value members’ benefits more than my personal gains. When you

facilities.”

serve the people you represent well, they

And that was not all. To get the Sacco to stand

appreciate you, and you are happy because they do. You can walk tall with pride.

firmly on its feet again, competent human resources were necessary. “As management we decided to hire qualified staff and give them freedom to operate within their areas. The

“My principle is: Do unto others what you would like them to do unto you.” Joining the Sacco as a senior book keeper, Dr.

argument was that competent and well paid staff will value their jobs so they will not want to risk losing their incomes by engaging in

Kyelenzi quickly rose through the ranks to become the Deputy General Manager before being appointed the CEO. He is convinced that

malpractices.

Saccos would be more useful to members if they “lived” by the “Sacco Model” which sees Saccos as humanitarian and not profit making enterprises.

“Finally we emphasized the use of ICT to ensure that the Sacco is sealed against fraud. As a result the Sacco has no fraud incidences.” Ultimately member confidence was restored as the Sacco improved its financial status. Today

“My understanding is that the purpose of saccos

the Sacco is debt free and has reserves of over Shs400 million. Membership has also increased to over 45,000 and monthly remittances are now Shs80 million up from Shs17 million at its

together so as to assist each other with lowinterest loans so they can improve themselves. That’s why at Kwetu Sacco we have retained the

troubled period. By 2014 the Sacco was stable enough to be licensed by Sasra. These are the achievements that have won Dr.

is not to give high dividends but to bring people

one percent per month interest rate on a reducing balance basis even when others have increased their interest rates. That’s what I am telling members of Kwetu Sacco. And I am glad they are with me in this.”

Kenya Cooperative Societies Yearbook 2019/2020

2019

Personalities

A Mission to

Serve Dr. Moses Chebor, the CEO of Boresha Sacco (formerly Baringo Teachers Sacco Society) in Baringo, counts it as the most significant day in his life: the day when he missed a job with the East Africa Industries (EAI) now Unilever. He had just completed his secondary school studies hoping to get a job to educate his siblings being the first born in a family of three. Everyone was sure he would get the job as everything was staked in his favor. But that was not to be so. “When I didn’t get the job, I prayed. I promised God that if he showed me what he wanted me to do, I would never fail Him,” recalls Dr. Chebor, who traces his strong Christian faith to the day his father, fresh from serving in the army,

Dr Moses Chebor.

introduced him to Bible reading. “I believe God listened to my prayer. I had just got out of the bus in Kabarnet back from Nairobi, the headquarters of EAI, when I met Samuel Cheptoo, former Deputy Mayor of Kabarnet Municipality who was then a councilor. I narrated to him my frustrations in Nairobi. He took my hand, walked me to a signboard with an advertisement for a clerk at Tugen Hills Farmers’ Cooperative Society. He gave me a piece of

Kenya Cooperative Societies Yearbook 2019/2020

Joseph Musyoki, who was then the Baringo District Cooperative Officer who taught him the golden rules of accounts – the credit and debit – and the highly talented and professional Mr. Robert Sang who was the Baringo District Cooperative auditor, whose accounting dexterity made him wonder whether he could ever be like him. “These were men of integrity, highly qualified, who believed in diligently serving the

public,” says Dr. Chebor. He didn’t stay long before the Cooperative sponsored him for a course at the then Cooperative College of Kenya (now The Cooperative University of Kenya) where he learned accounts, the subject that had so much impressed him. These experiences led Dr. Chebor to develop a philosophy of life based on trust in God, humility and service to everyone with a motto: ‘God lifts you to higher levels if you humble yourself.’ And as fate would have it, a test of his philosophy soon popped up when he attended a youth camp at Ossen High School. In his pocket was

Dr Chebor in his graduation gown.

Shs1, 200 he had borrowed to buy iron sheets to refurbish his house. “When I arrived at the camp I found it was poorly organized – even food for the campers was lacking. I decided to use part of my

paper and encouraged me to apply. It wasn’t long before I was called for an interview and I was hired – starting me on a career of service in the cooperative movement.” It was at Tugen Hills Farmers’ Cooperative Society that Dr. Chebor met the men whom he now counts as his greatest inspiration – Mr.

loan to buy foodstuffs for the campers.” And, to his surprise, while at the camp, he was invited for an interview at Baringo Teachers Sacco for the position of Secretary Manager. And even more surprising was that he got a letter offering him the job with a higher salary before he left the camp. “I saw this as a sign of Gods’ faithfulness and it encouraged me to keep my promise to God.”

Kenya Cooperative Societies Yearbook 2019/2020

Baringo Teachers Sacco Society was a small organization housed at Kenya National Union of

had its share of challenges. And over the years, Dr. Chebor has used his philosophy to deal with

Teachers (KNUT) offices when Chebor joined it. The membership was only 1,800, but with an

the challenges and to build the Sacco to the rank of the top 10 societies in Kenya. Among his

asset base of Shs 15 million, much more than that

achievements, Dr. Chebor counts his efforts to

of the Tugen Hills Cooperative. It would certainly

keep the Sacco undivided following the creation

need diligence and skill to manage just as his mentors – Mr. Musyoki and Mr. Sang – had

of new districts in the 1990s. The formation of the new districts led to a wave throughout the

warned him. Fortunately he quickly noticed that

country to split saccos in line with the new

the management led by the late Nicholas Komen

districts. Boresha Sacco was not left out after

Kangogo, a man of integrity with passion for justice, honesty and thoroughness, was dependable. “At Baringo Teachers, I found a

Baringo District was divided into the districts of Baringo and Koibatek. “It was a campaign that was as fierce as it was prolonged. We fought

management team committed to building a successful Sacco. “

hard in the management to avoid any split because we believed that members would benefit by keeping the Sacco united.”

Today, Boresha Sacco boasts of an active membership of over 60,000 and 108,000 per

Dr. Chebor also faced a tough challenge

register, an asset base of Kshs7.2 billion, loan book of Shs5.7 billion and member savings of Shs4.7 billion. With its Head Office at Eldama Ravine the Sacco has 15 branches in Ravine, Kabarnet, Marigat, Mogotio, Kabartonjo, Mochongoi, Barwessa, Eldoret, Nakuru, Kapsabet, Chemolingot, Tenges, Mumberes, Kipsaraman, Kisanana and several satellite offices. Boresha Sacco membership has also widened to include small and micro enterprises (SMEs), Farmers, Jua Kali business persons, youth and women groups as well as chamas. In addition to savings and credit facilities, members access business training, exchange programmes and capacity building. But like other organizations, Boresha Sacco has Dr. and Mrs Chebor celebrate the award.

Kenya Cooperative Societies Yearbook 2019/2020

convincing members to contribute money for two plazas, the Teachers Plaza at Eldama

technology and Innovation as well as career development and life skills.

Ravine and Mwalimu Plaza at Kabarnet. Today, the two magnificent buildings stand as iconic

BVEP is a project of Boresha Community Foundation (BCF) the corporate social

landmarks having been constructed between the years 2000 to 2005 at the cost of Shs261

responsibility arm of Boresha Sacco which was founded in 2012, as Not for profit entity and

million raised through equity shares owned by members.

company Limited by Guarantee. It serves to

A similar situation occurred when the Sacco decided to rebrand in line with the trend

financial provider of choice by positively impacting the community with a focus on

occasioned by changes introduced in the

education, leadership development and peace

government cooperative development policy that allowed the widening of the common bond

Initiatives.

enable the Sacco realize its vision of being the

in 2010. ‘A section of the members did not want

Dr. Chebor has been at the helm at Boresha Sacco for over 34 years. And in 2010, he was

the name change that omitted the key words, ‘teachers’’ and ‘Baringo’. They feared they would lose their ownership and control. We were

recognized by the Geneva-based ILO-Coop Africa for his work in steering Boresha Sacco

convinced that the changes were necessary and

while the Society was recognized for trajectory growth. And because of his consistent and

made tireless efforts to show the benefits of the changes to the members.”

dedicated service to the community and

And indeed they were necessary. In fact, the Sacco has since had phenomenal growth and was the second in the country to be licensed by the Sacco Societies Regulatory Authority, Sasra. Under Dr. Chebor’s leadership, the Sacco has remained focused on service to members and the community. It set up and supports Bartek

application of his Christian values in the successful management of the Sacco, Dr. Chebor was awarded an honorary PhD by the American University (AU), one of the top 10 universities in the USA. Chartered by an Act of Congress in 1893, the aim of the AU was to create an institution that would promote public service, internationalism and pragmatic idealism.

Institute which has so far trained over 15,000

From his experience, Dr. Chebor believes that

students from the community. But the Boresha Vijana Empowerment Program (BVEP). remains the most ambitious of the Sacco’s community

leaders should not just be qualified but they should also be with foresight and integrity.

service projects. Launched in 2019, the program intends to empower and mentor youth in agribusiness, creative arts, entrepreneurship, sports,

Kenya Cooperative Societies Yearbook 2019/2020

2019

Personalities an organization whose benefits I had not fully comprehended. The concept of cooperative movement was new and I wanted to be convinced about its viability and how it would operate.” It is this questioning skepticism – a virtue in financial management – which Dr. Limo brought to his job of Treasurer of the Boresha Sacco eventually standing him among the great leaders of the cooperative movement, committed to community service.

Dr. Henry Limo.

Dr. Henry Limo Boresha Sacco's longest serving treasurer For four long years, Dr. Henry Limo resisted joining the newly formed Baringo Teachers Sacco, despite the fact that he was fully eligible for membership. That was in 1976 when he was starting out as a teacher. Today Dr. Limo is the Sacco’s longest serving treasurer. He recalls his earlier skepticism: ‘I was hesitant at first when I was told about joining

Dr. Limo started his career in cooperative management in 1992 when he was elected the delegate representing Ravine Zone. He vividly recalls the events that led to his election: “I had not offered myself for the position. Out of the blues, a member proposed me to represent the area. Then there was a chorus of agreement from the other members. I was declared the area representative, unopposed. I was humbled. I resolved: If these people have such faith in me I will not let them down.” His rise in leadership was quick after he was elected a delegate. In a further election of the committee members, he was elected the Treasurer, thus launching him on a long impactful career as a Treasurer – a position he has held for the past 27 years without a break. Following his unanimous election, Dr. Limo felt he

Kenya Cooperative Societies Yearbook 2019/2020

Dr Limo and his family celebrate after the degree award presentation.

had an obligation to serve and ensured that all members who applied for a loan had their applications processed promptly. “I visited the Sacco regularly during break times at school in

document, I always consult him to be double sure,” Dr. Limo says.

case there was a member who came from far and needed their loan to be approved. I wanted to save them the trouble of returning or hiring a place to stay awaiting approval. To me to hear a member say ‘Thank you’ is all that I desire.”

disciplinarian, taught him the importance of the age -old traditional value of integrity. His adherence to this value has also translated to a dedicated church leadership where Dr. Limo is currently the chairman of the local AIC council.

Among those he credits for his success as a Sacco leader is the late Nicholas Komen Kangogo, the founding chairman of the Sacco who emphasized to them the value of growing the Sacco for their

But Dr. Limo’s dedication to service spreads beyond the Sacco and the church. “My phone is always open in case there is a member of the community who needs my services, even at night

own and members’ benefits. “Mr. Kangogo reminded us every time: Eat only what is rightly yours and you will eat for long. What is not yours will choke you!”

time!” And many do, especially because he is one of the few villagers who own motor vehicles. “I will take anyone in need to the hospital free of charge.”

The CEO of the Sacco, Dr. Moses Chebor has also been an invaluable inspiration to Dr. Limo, especially in performing his accounting functions. “Even though I counter check before signing any

Dr. Limo however credits his mother for laying the foundation for his character. His mother, a staunch

And for this selfless service to the Sacco and the community, Dr. Limo was recently awarded an honorary PhD by the American University (AU), one of the top 10 universities in the USA.

Kenya Cooperative Societies Yearbook 2019/2020

PEOPLE ON THE MOVE Mary Mungai,(pictured below) retired in 2019 as Commissioner for Co-operative Development in the State Department for Co-operatives. It was during her tenure that the department developed agribusiness information portal, sharia compliant policy, and initiated negotiations for a cooperative share trading platform. Mrs. Mungai earlier held various positions in the Ministry of Agriculture where she including that of Deputy Principal in AHITI-Kabete. She holds a Masters degree in Agricultural Economics with a bias in Agribusiness from Purdue University West Lafayette Indiana, USA. Her first degree is in Bachelor of Science in Agriculture from the University of Nairobi.

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Taking up the position as the Commissioner of cooperatives is Geoffrey Jang’ombe (pictured, left) who brings a wealth of knowledge and skills gained as her deputy.

Also to leave the State Department for Cooperatives was the Principal Secretary (PS) Susan Mochache (picture, right). She had hardly settled in the department when she was transferred as PS to the Ministry of Health. Before joining the department, Mochache had held various positions in the the civil service including those of PS of Labour, Social Services and East African Affairs.

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Ali Noor Ismail returned to the department as the Principal Secretary (PS) replacing Mochache. Ali was not new to the department having been served as the PS earlier. The return gave him the opportunity to complete the projects he had initiated especially the development of the Cooperative Policy of Kenya.