Crucial Meeting by Co-operative Alliance of Kenya on National Cooperative Bill

28 March, 2025

The Co-operative Alliance of Kenya (CAK) convened an urgent and crucial meeting on March 26, 2025, bringing together chairpersons and CEOs of cooperatives and SACCOS. The primary agenda was to discuss the National Cooperative Bill, currently under consideration by the Senate, and other emerging lobby issues affecting the cooperative movement. This meeting underscored the importance of a unified voice among cooperative stakeholders to influence legislation that will shape the future of the sector.

Background and Importance of the National Cooperative Bill

The cooperative movement in Kenya has long been a vital pillar of the country’s economy, supporting millions of Kenyans in various sectors, including agriculture, finance, and trade. With over 14 million members engaged in cooperative activities, the need for a legal framework that facilitates growth, transparency, and efficiency cannot be overstated. The National Cooperative Bill, currently under Senate review, is expected to introduce key reforms that will modernize the cooperative sector, improve governance structures, and create a conducive business environment.

In recent years, cooperatives have faced challenges such as regulatory ambiguities, financial mismanagement, and limited access to credit. Addressing these issues requires policy interventions that are reflective of the needs and aspirations of cooperative societies. The Co-operative Alliance of Kenya, as the apex body representing cooperatives, has been at the forefront of advocating for legal and institutional changes that will enhance the sector’s contribution to national development.

Details of the Meeting

The meeting, held at Mwalimu National SACCO in Upper Hill, started at 10:00 AM and ran until 1:00 PM. The event brought together key decision-makers from various cooperatives, providing a platform for robust discussions on the National Cooperative Bill. The leaders were urged to engage actively in legislative matters and ensure that their collective voice is heard in shaping policies that directly impact their operations.

During the session, cooperative leaders were provided with essential documents, including:

• The Cooperative Bill Presentation – A comprehensive overview of the proposed legislative changes and their implications for cooperatives.
• The Senate Bills Digest – An analysis of the key provisions in the bill and how they align with existing laws and policies.
• The Cooperatives Bill, 2024 – A detailed document outlining the proposed framework for cooperative governance, financial management, and regulatory oversight.

Key Discussions and Resolutions

1. Cooperative Bill 2024 Journey

The meeting provided an in-depth discussion on the journey of the Cooperative Bill 2024, tracing its development from its initial drafting stages to its current position at the Senate. Stakeholders acknowledged the collaborative efforts that have been made in crafting a bill that aligns with the needs of cooperative societies while ensuring compliance with national regulatory frameworks. The leaders emphasized the importance of continuous engagement with lawmakers to ensure that the bill is passed without provisions that could negatively impact cooperatives.

2. Key Sections of the Bill

The meeting focused on analyzing the crucial sections of the proposed Cooperative Bill 2024 that would directly affect cooperative operations. Some of the highlighted provisions included:

• Governance and Oversight – Strengthening leadership structures to promote transparency and accountability within cooperatives.
• Financial Management and Reporting – New financial regulations aimed at improving SACCO stability and ensuring prudent management of member funds.
• Digital Transformation – Provisions encouraging the adoption of technology to enhance efficiency and service delivery within cooperative societies.
• Member Rights and Participation – Ensuring that cooperative members have a stronger voice in governance decisions and financial matters.

3. Way Forward (Next Steps)

To address concerns regarding Section 61(2) of the Bill, the meeting resolved to take the following steps:

• Engage the Senate – Cooperative leaders will actively engage the Senate through the Committee in charge of Cooperatives to review and amend Section 61(2).
• Revert to the Original Bill – The meeting recommended reverting to the original bill tabled in the National Assembly, specifically ensuring that the provision states: “Members of the board of directors shall be elected for a term of three years and shall be eligible for re-election.”
• Amend Section 61(2) for Self-Regulation – Cooperatives should be allowed to determine board members’ terms in their own by-laws rather than having a blanket restriction imposed.
• Remove Section 61(2) and Develop Regulations – Instead of imposing term limits in the Bill, the CS in charge of Cooperatives should be allowed to develop regulations that guide board members' terms of service.

Justification for Review/Amendment of Section 61(2)

The stakeholders provided several reasons why Section 61(2) should be reviewed or removed:

1. Limiting board members to two terms is unfair – This restriction could deplete the leadership resource within cooperatives.
2. Not all members are qualified to serve on the board – The assumption that all members have the capacity to lead may not be practical.
3. Contradiction with Clause 4 of the Bill – The proposed term limits contradict the principles of democratic member control, autonomy, and independence.
4. Interference with democratic rights – Limiting board members to two terms of three years each would infringe on members' democratic rights to elect their preferred leaders.
5. Over-regulation of cooperative affairs – The proposal introduces unnecessary legal restrictions on cooperatives, undermining their autonomy.
6. Existing regulatory bodies provide sufficient oversight – The Commissioner, County Directors of Cooperatives, and SASRA already provide adequate safeguards against mismanagement.
7. Democratic control should be upheld – Members should retain the right to elect their leaders without external restrictions.
8. Public participation already rejected term limits – The issue of board term limits was extensively discussed during public consultations and was ultimately dropped from the initial draft bill.
9. Existing laws are adequate – The Cooperative Societies Act (1997) and Cooperative Rules (2004) already provide clear guidelines on board elections and term limits.
10. Impact on secondary cooperatives and unions – If not amended, Section 61(2) could disrupt leadership succession in secondary cooperatives, unions, and national cooperatives.

Implications of the National Cooperative Bill

The National Cooperative Bill, once enacted, is expected to bring significant changes to the cooperative sector. Some of the anticipated impacts include:

• Improved Regulatory Oversight – The bill seeks to enhance the role of regulatory bodies in overseeing cooperative operations, thereby reducing instances of mismanagement and fraud.
• Greater Financial Inclusion – By promoting a conducive financial environment, the bill aims to expand cooperative access to funding opportunities, benefiting members through better credit facilities.
• Enhanced Member Participation – Cooperatives will be required to adopt more transparent decision-making processes, ensuring that members have a greater say in governance matters.
• Modernization of Cooperative Operations – The bill encourages the adoption of digital solutions, making cooperative services more accessible and efficient.

Conclusion

The meeting at Mwalimu National SACCO marked a significant step in ensuring that cooperatives actively contribute to shaping the legal framework governing their sector. The discussions highlighted key areas of concern and opportunities for growth within the cooperative movement. The Co-operative Alliance of Kenya reaffirmed its commitment to advocating for a legislative environment that supports cooperative development, economic empowerment, and member prosperity.

As the National Cooperative Bill moves through the legislative process, cooperative stakeholders must remain engaged and vocal about their needs. The cooperative movement has long been a driver of economic progress in Kenya, and with the right legal and policy support, it will continue to play a pivotal role in national development. The unity and resilience of cooperatives will be instrumental in ensuring that the final bill reflects the aspirations of millions of cooperative members across the country.