Why Sacco is rejecting delegate system for large cooperatives

Members of Nyandarua-based Tower Sacco have rejected a government directive requiring cooperative societies with at least 5,000 members to adopt a delegate system, warning that the move could undermine transparency and threaten the stability of the institution.

Speaking during the Sacco’s 50th annual general meeting held in Ol Kalou, members said the delegate system is prone to manipulation and compromise, arguing that it would deny ordinary members a direct voice in decision-making.

The directive, issued mid-last year by the Commissioner of Cooperatives on behalf of the parent ministry, requires large cooperative societies to adopt a delegate system to enhance representation and improve governance. However, Tower Sacco members overwhelmingly opposed the proposal.

Ben Gitahi and Joseph Mbugua led members in rejecting the directive, citing past failures of cooperatives that had adopted the system. Tower Sacco has a membership of about 240,000.

“The delegate system killed other societies because the delegates are prone to being compromised. We cannot allow it in our Sacco,” said Mr Mbugua.

When chairman Peter Ngugi put the proposal to a vote, members unanimously rejected it.

During the meeting, the board of management also turned down a proposal by members to review the Sacco’s dividend rate  upwards from the current 13 per cent, which has been maintained for the past 10 years.

Mr Ngugi defended the rate, describing it as “the highest in the country,” although a member challenged the claim, noting that some Saccos offer dividends of up to 14 per cent.

The AGM, held at the Catholic grounds in Ol Kalou, also celebrated 13 needy students whose secondary education had been sponsored by the Sacco and who attained grades qualifying them for university admission in the 2024 KCSE examinations.

“The students will be attached to Tower Sacco branches near them as they wait to join the university,” Mr Ngugi said, as he introduced the seven boys and six girls.

CIC Group Chief Executive Officer Patrick Nyaga, who was the chief guest, urged the Sacco to modernise its operations by embracing technology, while cautioning against cyber risks.

“As you embrace technology for improved service delivery, I urge you to invest in cybersecurity because, as you use technology for good, others are planning how to use it to steal,” said Mr Nyaga.