Cooperatives ministry disowns controversial Sacco societies bill

The Commissioner for Cooperative Development Mary Mungai says the department of Cooperatives has no idea who sponsored a controversial Bill that threatens to water down the independence of savings and credit societies.

She said the department only learnt about the amendments through the Press after it was put up by Parliament for public participation and her team was never consulted for any input.

She wants the Sacco Miscellaneous Bill 2018 thrown out.

“We are not sure who the drafter of the Bill is but we have put in mechanisms to find out who that is so that we can interact with them and possibly guide them on how that bill should have come to the fore,” said Ms Mungai.

“As the mother ministry for any important cooperatives law that goes out, we had not interacted with the proposed law.”

Addressing the Press on Friday in Nairobi after a Kenya Union of Savings and Credit Cooperatives (Kusco) annual general meeting, Mungai said the amendments will conflict with the cooperative principles.

She is wary the proposals, which recommend among other things the creation of a class of members referred to as “social impact members” to pump more money into Saccos, will hurt the spirit of the cooperative movement.

Kusco Managing Director George Ototo said the Bill should be recalled since it is against cooperative principles in terms of member participation.

“The mezzanine structure of directorship will not work in a cooperative set-up. Social impact members will create a different layer of membership and that will lead to segregation of members and stratification of membership,” he said.

According to Cooperative Alliance of Kenya Executive Director Daniel Marube, the thinking behind the amendment is that the cooperative societies do not have sufficient capital for growth.

Dangerous move

However, he cautions that the move is dangerous since the social impact members will take over social cooperatives and expose members’ deposits to risks.

“There is possibility that we are going to open room for people who have stolen money from Government or made it from drug deals to come in and clean it,” argued Mr Marube.

He said the incoming investors will thrive on the more than Sh800 billion deposits already built up by cooperative movements yet they will not appear in the books as members.

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