As we celebrate International Day of the Cooperative this year, we recognize that over the last several months' cooperatives have demonstrated their resilience and their dedication to bettering the world.
The cooperative sector in Kenya jumped into action to help their members and communities during the Covid-19 pandemic and resulting economic crisis. From individual cooperatives using their funds to provide PPE and food to neighbours to national cooperative organizations initiating large scale assistance programs, the Kenyan Cooperative Sector has made a huge impact in just a few months.
Just a few short weeks after Covid-19 and related “stay at home” orders arrived in the US, Kenya began feeling its effects as well. New daily cases began to drastically increase in early May and as of mid-June, Kenya had over 6,000 cases even with limited testing sites outside of city centres.
Curfews and travel bans have been imposed to deter the spread of Covid-19 into the rural counties, but have also made business difficult. SMEs including cooperatives often struggle to withstand temporary closures, lower sales, and higher input prices.
Where they do differ is cooperatives’ concern for the community and their membership. In a crisis like these, Cooperatives tie their business interests with a desire to support their communities.
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To better understand the effects of Covid-19 and the efforts of cooperatives to better their world, the USAID/CLEAR program began conducting monthly surveys with 24 cooperatives in May. The data shows that Kenyan Cooperative businesses and their members have felt the effects of Covid-19 yet are actively working to meet the needs of their members and communities to keep people healthy and financially stable.
Of the Cooperative businesses participating in the study, all but one said that their operations had been impacted by Covid-19. On average Cooperatives reported a 30 per cent decrease in revenues with some claimed losses of up to 60 per cent. The majority (70 per cent) stated that social distancing restrictions had limited their operations and over 30 per cent of cooperative businesses sited closed markets or points of sale as a top challenge. This data, which continues to be collected monthly, will guide the program to develop strategies to support cooperative businesses throughout the remainder of the shutdown and prepare to re-open when allowed. Specifically, the results show that helping Cooperatives adjust production or services to meet social distancing guidelines and identifying virtual (or socially distant) points of sale would help them to overcome reduced revenues and increase their ability to support their members.
Beyond their business, the data shows that cooperatives also embody Concern for the Community, the seventh principle of cooperatives. Across all eight countries, Cooperatives reported three primary challenges for their members: lower-income, delays in payment for products or services, and difficulty accessing food due to unavailability or higher cost.
Response to Lower Incomes & Delay in Payment: One of USAID/CLEAR’s intermediate results is ‘Improved Cooperative Businesses,’ a task which requires capacity building in budgeting and risk planning to be successful. CLEAR’s cooperative coaches work to develop sustainable budgets and pricing models to ensure cooperatives can pay members and employees fairly and in a timely fashion. This work will continue, perhaps with more purpose during and following Covid19. This season has highlighted the importance of a strong budget, retained capital for emergencies, proper equity allocations, and risk planning. While CLEAR does not provide loans for Cooperatives, the program does help broker conversations around access to finance and advocates for equal opportunity lending.
As we recognise International Day of the Cooperative we celebrate how Cooperatives in Kenya continue to demonstrate a commitment to mitigating the effects of Covid-19 in tandem with their business success, a true symbol of both cooperative resilience and concern for the community.