President Uhuru Kenyatta has challenged savings, credit and cooperative societies (Saccos) to invest in Government infrastructure projects and help reduce reliance on foreign loans.
Uhuru said this as he outlined how his regime’s policy reforms have boosted the growth of the Sacco movement in the past 10 years.
“I believe cooperatives can be major players in the development of our social infrastructure as well. There is no reason why Sacco savings cannot be utilised to build roads instead of the government paying for loans from foreign countries but if you loan us, we build roads and money enters your pockets,” he said.
Uhuru said reforms have since 2013 seen Saccos grow and increase their membership, deposits and end pyramid schemes. Current Sacco membership, he said, has grown from three million in 2014 to 5.5 million in 2021.
He was speaking yesterday at the Kenyatta International Convention Centre (KICC), during celebrations to mark the 100th International Ushirika Day.
The day is set aside by the United Nations to reflect on the achievements of the co-operative movement. This year’s theme was ‘Cooperatives Build A Better World.’
In terms of loan portfolios and deposits, he said the industry has registered great performance, growing from Sh228 billion in 2014 to Sh528 billion in 2021 as deposits grew from Sh206 billion to Sh474 billion.
Further, he said the Central Liquidity Facility, meant to protect Sacco members’ savings, will be operationalised after getting Cabinet approval and is only awaiting Parliament to pass it.
“My Cabinet has also approved legal amendments towards setting up a deposit insurance for Saccos under the Deposit Guarantee Fund that will play an equal equitable role in enhancing the financial stability of Saccos by compensating depositors in the event a Sacco collapses,” he said.
President Kenyatta added that reforms in Saccos in the agriculture sector including coffee, tea, dairy and rice have been greatly turned around.
For instance, in the rice sector, the Head of State cited the Sh660 million revolving funds to ensure farmers receive prompt payment upon delivery of their produce to their societies.
He also said the government is contemplating revitalising the cotton cooperatives to enable them to provide raw materials to textile value chains.
“A taskforce was formed to spearhead the reforms and among the recommendations were to revitalise old and build new ginneries where necessary,” he said.
Mcloud Malonza, chairman of Cooperative Alliance of Kenya said the membership of the cooperative movement globally stands at over 1.2 billion.
“This constitutes 12 per cent of the global population and employs over 280 million people... the top 300 cooperatives have a turnover of $2.3 trillion (Sh271 billion) according to International Cooperative Alliance,” he said.
The Kenyan cooperative movement is ranked number one in Africa and seventh in the world according to the International Cooperatives Alliance with over 26,000 registered cooperatives with a membership of around 14 million.
“Today, 32 per cent of national savings are with cooperatives with agriculture-based ones leading with an asset base of Sh11.6 billion in the coffee sector, farmers savings standing at Sh52.9 billion and loaned members Sh1.38 billion and a turnover of Sh11.9 billion of followed by housing investment at Sh38 billion, deposit of Sh9.9 billion and loans at 2.1 million,” he said.
United Nations Sacco, Kenya Police DT Sacco and Cooperatives Sacco were awarded as the best-managed Saccos.