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We must protect our cooperatives money from suspicious laws



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In Kenya, some ridiculous politician has realised that Wanjiku has been able to drag herself out of poverty through the cooperative movement, and has proposed, through the SACCO Society Amendment Bill (2018), to allow parties who have no savings in the SACCOs to be able to access member’s savings.

The amendment proposes to allow ”Social Impact Members” to access SACCOS through their investment committees. It is also proposed that they cannot be answerable to members during an Annual General Meeting, where all major decisions regarding SACCOS are made.

What then, prevents such members from operating with impunity and what is this alleged social impact they will have if they cannot be answerable to the Kenyans who have slaved to save shilling after shilling to create the kitty that is suddenly attracting such suggestions?

The cooperatives movement is essentially a mammoth self-help group. As such, there is no cooperative movement that exists to maximise on profits, but rather they are for the purpose of fulfilling the needs of members by offering services to them, be it in the areas of marketing of produce, Housing or Saving and Credit Cooperative Organisations (SACCOs), as they are popularly known.

SACCOs were started by workers in the early 1800’s when they realised that governments had become entities of capitalism. Capitalism in its basic definition is the private ownership of the factors of production, distribution and exchange in a free market. In this system, development, in its economic definition, occurs through the accumulation of profits that is consequently reinvested.

The majority of citizens around that time when SACCOs were started – labourers, farmers, weaver and employed workers – realised that at the end of each pay cheque or the toils of their labours, they had nothing to invest. They were strained to meet the barest minimum, catering for survival, food, clean water, cloths and shelter.

The ordinary people also realised that they would be marginalised to the outskirts of economic development and social inclusion. Their only advantage was in their numbers, as they constituted a majority of the population. Does this yet sound like Kenya today?

Since the only way to make investments is to consistently spend less than what one earns to enable saving, they use the power of numbers to accumulate group savings that would be subsequently invested or lent to members.

By their numbers, ordinary Kenyans have also accumulated substantial amounts in SACCOS. It was also a realisation of the power in numbers; the movement in Kenya has close over 3.5 million members. So even if each members saves two thousand shillings a month (some save much more), these savings amount to billions of shillings.

Co-operators have utilised the little resources available to them to improve their own livelihoods. As the founder of cooperatives, Robert Owen stated, co-operators have found a way to ”drag themselves out of poverty”.

The amendment also proposes that members of the movement are not informed when any default on their part is reported to the credit Reference Bureau. The suggestion sounds reasonable, but it creates the possibility of ghost debtors, whose ”unpaid” loans can amount to billions of shilling. At the moment, a SACCO notifies defaulting member of their unhonoured loan payments and also informs their guarantors. The level of debt created amongst members is therefore common knowledge among themselves.

Kenya Union of Savings & Credit Co-operatives Ltd (KUSCCO) has raised the alarm on these amendments. But ultimately it is members who will need to take action, should politicians, in their typical stunt, ignore these concerns and go ahead and pass the bill into law.

Mammoth giant cooperatives in Kenya, meant to market pyrethrum, coffee, tea, maize, and milk have all been brought to their knees. It seems like they can no longer serve as cash cows, to ”unknown cartels”. So some ”brilliant” politician wants to make available ordinary Kenyans savings to what are being referred to ”Social Impact Members”.

Since the SACCO movement is free entry and free exit, Kenyans will certainly not wait to feel the impact of these nameless, faceless members. Maybe it is time to move our savings further away from politicians into our ”chamas” until they create a law to access our money kept there too.