New co-ops trading platform planned

The commissioner of co-operatives is leading an initiative to form a trading platform known as shares future to earn investors more benefits from their capital stock.

The platform, most likely to be established under the Nairobi Securities Exchange, would give society members capability to liquidate their savings and earn premiums, something which is impossible in the current set-up.

A technical working group comprising of representatives of the Capital Markets Authority, the Sacco Societies Regulatory Authority, the Co-operative Bank, Kingdom Sacco, Kenya Union of Savings and Credit Co-operatives and representatives of individual co-operative societies is working on modalities of establishing the trading platform.

According to Deputy Commissioner of Co-operatives Philip Gichuki, Kenya would become the first country in Africa to give co-operative society members capability to quickly transform their share savings into liquid cash if it establishes the platform.

“The prevalent feeling is that currently, the members are disadvantaged because the only way they can convert their savings into cash is through selling to other members usually at the nominal value and that is after years of building the savings and rise in value,” Gichuki said in Meru.

Gichuki also said the new market would enable co-operative society members to buy a stake in the most successful societies and mobilisation of capital by the societies.

The ministry, however, said the new move would require the amendment of the Sacco Act and the Co-operative Societies Act to absorb the changes and allow trading of shares.

Gichuki said lack of a legal framework to enable cooperatives raise money through sale of shares affects the sector and cited Unaitas Sacco which faced challenges while trying to convert into a bank.