Trade, Industry, ICT and Cooperatives Committee Report an A Benchmarking exercise To Various
Cooperatives In Kenya. 1
COUNTY GOVERNMENT OF KITUI
COUNTY ASSEMBLY OF KITUI
______________________________
FIRST COUNTY ASSEMBLY
___________________________
FOURTH SESSION, 2016
______________________
THE SECTORAL COMMITTEE ON TRADE, INDUSTRY, ICT AND
COOPERATIVES
______________
REPORT ON A BENCHMARKING EXERCISE TO VARIOUS
COOPERATIVE SOCIETIES IN KENYA
__________
(15TH TO 20TH MAY, 2016)
_______
Clerk’s Chambers
Kitui County Assembly
P.O. Box 694 – 90200
KITUI.
OCTOBER, 2016
Trade, Industry, ICT and Cooperatives Committee Report an A Benchmarking exercise To Various
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ACRONYMS AND ABBREVIATIONS
SASRA Sacco Societies Regulatory Authority
KUSSCO Kenya Union of Savings and Credit Co-operatives Ltd
FOSA Front Office Services Activity
BOSA Back Office Services Activity
ATM Automated Teller Machine
SACCO Savings and Credit Co-operative
KCC Kenya Co-operative Creameries
CEO Chief Executive Officer
ICT Information Communication Technology.
NTSA National Transport and Safety Authority
SMS Short Message Service
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TABLE OF CONTENTS
CHAPTER ONE ................................................................................................................................... 5
PREFACE .............................................................................................................................................. 5
Terms of Reference ............................................................................................................................... 6
Background ........................................................................................................................................... 7
Specific objectives of the tour .............................................................................................................. 8
CHAPTER TWO ................................................................................................................................ 10
Fresha Dairy Company and Githunguri Community Sacco........................................................... 10
Fresha Dairy Company ...................................................................................................................... 10
Githunguri Dairy and Community Sacco ........................................................................................... 4
Murata Sacco and Absom Motors ..................................................................................................... 11
Maragua Boda Boda Sacco ................................................................................................................ 13
Ufundi Sacco ........................................................................................................................................ 13
CHAPTER THREE ............................................................................................................................ 15
STATUS OF COOPERATIVE SOCIETIES IN KITUI COUNTY ............................................... 15
Challenges facing Sacco Societies in Kitui County:- ........................................................................ 22
Challenges Facing Producer Based Cooperative Societies in Kitui County:- ............................... 23
Challenges facing Ranches and Housing Cooperatives:- ................................................................ 23
CHAPTER FOUR ............................................................................................................................... 24
RECOMMENDATIONS .................................................................................................................... 24
CONCLUSION ................................................................................................................................... 25
ANNEXURES ...................................................................................................................................... 27
Trade, Industry, ICT and Cooperatives Committee Report an A Benchmarking exercise To Various
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EXECUTIVE SUMMARY
Mr. Speaker Sir,
This report documents lessons and experiences drawn during a benchmarking exercise
by the Assembly Sectoral Committee on Trade, Industry, ICT and Cooperatives to
various Saccos across Kenya as from 15th – 20th May, 2016.
Chapter One of this report gives the background and specific objectives of the
benchmarking exercise.
Chapter Two details key findings, observations and challenges gathered from each
Sacco the committee visited.
Chapter Three gives the status of the cooperative societies industry in Kitui County.
This chapter further touches on registration of cooperative societies in the County as
well as the challenges faced in their operation and sustainability.
Chapter Four contains recommendations and conclusion made by the Committee. The
recommendations made are geared towards empowering the Kitui County business
community in formation, operationalization and sustainability of successful cooperative
societies. Some of the recommendations that the committee makes include:-
1. That the proposed County Cooperatives Bill establishes a fund from where
community based cooperative societies can borrow to lend to their members.
2. That the cooperatives sector of Kitui County embarks on vigorous capacity
building exercises to empower all established cooperative societies, as well as
potential business ventures.
3. That the County Ministry of Trade, Industry, ICT and Cooperatives encourages
diversification of business undertakings by its citizens so as to counter the effects
of adverse weather on agriculture based businesses.
4. That the County Ministry of Trade, Industry, ICT and Cooperatives creates a
mentorship forum where experts from thriving cooperative societies across
Kenya are invited to create awareness and share on the benefits of cooperative
societies.
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CHAPTER ONE
PREFACE
Mr Speaker Sir,
It is my honour and pleasant duty to present to this House, the report by the Committee
on Trade, Industry, ICT and Cooperatives on a benchmarking visit that was made to
various Cooperative societies across the Country. The Committee during the exercise
visited Kiambu, Kajiado, Murang’a and Nairobi Counties.
Membership of the Committee
The Committee as currently constituted comprises of the following Honourable
Members:
1. Hon. Daniel Ngoima Kimanzi Chairperson
2. Hon. Peter Mwikya Kilonzo Vice Chairperson
3. Hon. Nzuki Wambua Member
4. Hon. George Souza Kililiku Member
5. Hon. Samuel Muriungi Ikunga Member
6. Hon. Patricia. K Kimanzi Member
7. Hon. Peter Mutemi Member
8. Hon. Mary Ndumbu Member
9. Hon. Colleta Kimanzi Member
10. Hon. Mary Mbandi Member
11. Hon. Angela Kanza Member
Committee Mandate and Legal Basis
The Committee on Trade, Industry, ICT and Co-operatives was constituted by a
resolution of the House in May 2013. It is a Sectoral Committee that draws its mandate
from Standing Order No. 190 (5), which defines functions of sectoral committees as to,
among others;-
a) Investigate, inquire into, and report on all matters relating to the mandate,
management, activities, administration, operations and estimates of the assigned
departments;
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b) Study the programme and policy objectives of departments and the effectiveness
of the implementation;
c) Study and review all County legislation referred to it;
d) Study, assess and analyse the relative success of the departments as measured by
the results obtained as compared with their stated objectives;
e) Investigate and inquire into all matters relating to the assigned departments as
they may deem necessary, and as may be referred to them by the County
Assembly;
Terms of Reference
The committee was expected to study best practices by renowned cooperative societies
in the Country whose operations are similar to the ones in Kitui County. Members were
further expected to gather information on the formation, operationalization and
sustainability of these exemplary cooperative societies and table a report for
consideration by the County Assembly. A Report that, inter-alia, contains
recommendations that will improve the Kitui County Cooperatives sector.
Challenges
The Committee encountered a challenge during the benchmarking tour. One particular
cooperative, the Ngong butchers’ cooperative society appeared to be experiencing
technicalities in its management. The committee was therefore not furnished with
detailed information about the Sacco due to this same challenge. That notwithstanding,
the committee was able to properly execute its benchmarking and achieve its set out
objectives.
Methodology
The Committee’s work was guided by the above mentioned terms of reference as well
as the following adopted general methodologies:
1) Preparatory meetings: - Prior to the exercise, the committee held preparative
meetings during which the itinerary was drawn and letters written to the
management of the respective cooperative societies to be visited.
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2) Meetings with the management: - The committee held in-depth discussions
with the officials where each cooperative society was thoroughly detailed.
3) Direct observation: The committee realised part of the learning through direct
observation.
4) Recording of information: This was done using recorders as well as physical
writing and the information has been maintained for future referencing.
5) Photography: Photographs of the cooperative societies visited were taken and
have been featured in this report. (See Annex 1)
Background
Mr Speaker Sir,
This benchmarking exercise was a component of the Committee’s annual work plan for
the financial year 2015/2016. In embarking on this exercise, the committee sought to
establish how cooperative societies across Kenya are successfully formed, managed and
sustained. This was in view of improving the overall performance of the Kitui County
cooperatives sector. The cooperative societies visited have amassed numerous years of
useful knowledge and management skills which have improved the social and economic
wellbeing of business entrepreneurs.
In studying on the best practices in cooperatives management, the committee’s main
goal was to come up with viable recommendations on how the cooperatives sector in
Kitui County can be developed to promote local businesses, self-reliance and improve
on the living standards of its residents.
Kitui County is well endowed with numerous business ventures whose growth potential
has remained redundant due to lack of financial support, formation of proper policy
frame works and legislation. This committee therefore, expeditiously identified and
visited cooperative societies and borrowed the best practices for development of the
same sector in Kitui County.
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Specific objectives of the tour
The main objective of the study tour was to learn and acquire information on among
others, the following areas:
1. Exploitation of the potential of formation of Co-operative Societies and Saccos.
2. Creating opportunities for traders in getting fair value for their goods.
3. Enhancement of governance, cooperative management, record keeping and
general management skills in cooperative societies.
4. Improvement of transparency, accountability and compliance to law by
cooperative societies.
5. Enrichment of cooperative societies development and market linkages and;
6. Increment of value addition to the products and services offered by the
cooperative society members.
ACKNOWLEDGEMENTS
Mr. Speaker Sir,
The Committee on Trade, Industry, ICT and Cooperatives expresses its utmost gratitude
to the Offices of the Speaker and the Clerk of the County Assembly of Kitui for the
support and facilitation accorded to it in the execution of this benchmarking exercise.
Further, the Committee appreciates the earnest reception by the C.E.O’s and members
of staff of the Cooperative societies visited. These officers assisted in securing
appointments for the Committee and provided in depth information of the cooperative
societies during our interactions. Their involvement was instrumental in making the
benchmarking exercise successful.
I also wish to extend my sincere gratitude to the Secretariat Ms Lele for the input and
valuable contribution during and after the visits, principally in compilation of this
report.
Finally, I wish to express my appreciation to the Members of the Committee who took
time off their busy schedules to participate in this laborious activity. Fellow committee
members, your committed participation during the benchmarking exercise is highly
appreciated.
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Mr. Speaker Sir,
I wish to confirm that the findings and recommendations of the Committee and any
other information as contained herein were unanimously agreed upon by all the
committee members.
It is therefore my pleasant duty and privilege, on behalf of the Committee on Trade,
Industry, ICT and Cooperatives, to present to this House, the committee’s report on the
benchmarking exercise to various cooperative societies across our Country Kenya.
Thank you,
Signed: _______________________________ Date: ________________________
(HON. DANIEL NGOIMA, MCA)
CHAIRPERSON
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CHAPTER TWO
COMMITTEE FINDINGS AND OBSERVATIONS
The committee held discussions and documented a number of findings/observations
and challenges faced by each cooperative society visited as detailed below.
Inter Relationship between Fresha Dairy Company and Githunguri Community
Sacco
The Fresha Dairy Company and Githunguri Cooperative Sacco work hand in hand. The
dairy company competitively purchases milk from farmers and processes it into
different dairy products with a longer shelf life and market demand. The Githunguri
Cooperative Sacco consequently provides accessible and diversified financial services
to the same farmers. This is achieved through mobilization of savings and application
of a prudent management system for the improved economic wellbeing of its members
and stakeholders.
Fresha Dairy Company
Background
The Fresha Dairy plant was established in the year 2004. Its mandate is to collect milk,
process it and market the produce at an optimal return to its members. The processed
dairy products produced include:-Pouch fresh milk, long life milk, flavoured yoghurt,
butter cream and ghee. The shareholders of the dairy company are mainly dairy farmers
from Githunguri locality.
Findings / Observations
1. The company endeavours to produce the best quality dairy products. This is
achieved through receipt of good quality milk from farmers as well as taking the
least time possible to process the milk (not more than 3 hours after collection.)
2. The company competitively identifies and creates a ready market for the final
milk products.
3. The dairy company provides subsidised benefits to its members such as AI
(Artificial Insemination) at a subsidised cost.
4. The company through the cooperative capacity builds farmers on the best
practices in dairy farming. This ensures production of quality milk. Farmers are
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regularly educated on proper animal and animal feed farming among other
trainings.
5. The cooperative also capacity builds its own staff members to acquire the
necessary expertise enabling them provide practical solutions to farmers’
challenges and add value to their milk production business.
Githunguri Dairy and Community Sacco
Background
The cooperative started thirteen years ago and is established under the Co-operative Act
of the laws of Kenya. It offers FOSA and BOSA Services (see abbreviations) and Credit
Facilities.
Findings / Observations
i. The cooperative ensures easy accessibility through branching out. The
committee observed that this is facilitated by an ICT software which seamlessly
links branches to the head office.
ii. The employees are extensively trained at all job positions in the cooperative.
They are empowered to work across the board at any job position ensuring that
work does not stop for any reason.
iii. The Sacco has an open bond which allows members of public other than dairy
farmers to buy shares. This has increased the membership numbers and amount
of savings.
iv. The finance department maintains a steady budget allocation for operations of
all departments. This ensures uninterrupted functioning and loan distributions.
v. The cooperative cultures and maintains constant communication with its
members. This is achieved through the use of SMS system as a modern telephone
technology to send alerts to members.
vi. This Sacco impressively safeguards members’ funds through its audit
department. It is able to detect fraud in its early stages thereby minimising losses
and maximising profits for its members.
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Challenges
i) Competition from existing parallel saving and lending businesses in
Githunguri locality which offer similar products to Githunguri cooperative.
This poses the challenge of loss of existing members.
ii) Default in loan repayments by members with loans. This negatively affects
the financial status of the cooperative.
iii) Bad publicity caused by a few disgruntled customers. This results to
withdrawal of existing members thereby threatening the sustainability of a
good Sacco membership number.
iv) Complex compliance requirements by the regulatory body SASRA. This
body dictates financial ratios to be maintained by the cooperative which tend
to limit the financial investments that can be made on behalf of members.
v) Customer turn overs due to members’ unmet expectations of high annual
dividends annually.
vi) High cost of operations caused by provision of financial security for
operations, staff trainings and keeping up with constantly evolving ICT
systems.
vii) Heavy taxes and levies imposed by the National and County governments
especially direct taxes which the Sacco bears on behalf of its members
challenging profits and dividends gained.
viii) The variance in income capacity of individual Sacco members. This poses
difficulty in making financial projections as savings fluctuate frequently.
ix) Inability of members to utilize modern technology such as M-banking due to
illiteracy and old age.
x) Slow paced a customization to new ICT systems by employees. This causes
work related errors and fraud risks occasioned by introduction of new ICT
systems
xi) Occasional systems downtime. Breakdown of the outsourced ICT systems
that support spot cash and ATM services result to inconveniences in customer
service and delays.
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Murata Sacco and Absom Motors
Background
This is a Sacco that extends savings and credit facilities to organised groups of
motorcycle owners commonly known as boda boda operators. The Sacco has partnered
with Absom Motors a renowned company that specializes in supplying motor cycles
countrywide. Absom motors is well accustomed to Murata Sacco’s products and works
as a delegate for the Sacco.
Findings / Observations
i) The Sacco has created a partnership with Absom Motors Company to
encourage more membership through provision of motorbikes at a subsidised
cost. This includes sale of motorcycles and spare parts at affordable prices.
ii) Murata Sacco through Absom Motors offers free entrepreneurship advice to
groups of commercial motorbike transport operators and further encourages
them to secure loan facilities from the Sacco.
iii) The cooperative champions registration of organised boda boda groups. The
groups register a group name and bylaws which govern their operations under
the National Transport Safety Authority.
iv) The cooperative endeavours to create awareness and emphasise on the
importance of savings through member trainings.
Challenge
i) High levels of poverty and unsustainable income of motor bike operators.
This causes them to fail to meet the maintenance cost of the motor bikes
which eventually break down fast leaving them in bad debts.
Maragua Boda Boda Sacco
Background
The Sacco was established in the year 2013 through support by the governor who
guaranteed the Sacco s loan amount totalling to 1.5 million. The committee learnt of
that the County Governor guaranteed the acquisition of a 1.5 Million shillings loan
amount which was used to start the Sacco.
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Initially, the target membership was of motorbike operators, however due to the massive
growth the Sacco has since floated an open bond where other members of the
community including, civil servants and business holders have been incorporated.
Findings / Observations
i) The Sacco encourages membership through provision of subsidised services
to its members. This includes direct sale of motorbikes and spare parts at
optimised costs.
ii) The Sacco makes impressive sales selling a minimum of ten motorbikes per
month at a profit of Kshs 7,000 per motor bike. This has also seen a rise in
membership number.
iii) The Sacco cooperates with the County government in a program which
sponsors individuals from Muranga County for motorbike driving school and
license registration fee. This has promoted self-employment and reliance.
Challenges
i) Lack of awareness. Majority of Maragua residents have not embraced the
importance of Saccos whereby many prefer to have liquid cash at hand as
opposed to savings.
ii) Unfounded sudden and unexpected withdrawal of contributions by some
members which destabilize the Sacco’s finances.
Ufundi Sacco
Background
The Sacco began in the year 1972. It started majorly with a focus on recruiting civil
servants and grew to have about 35,000 members. The main purpose of the Sacco was
to improve the socio – economic status of its members. The Sacco envisioned to achieve
this through purchase of assets, extension of loan facilities at an affordable interest rate
among other services. The Kenya bomb blast incident of the year 1998 led to members
withdrawing their savings from the cooperative thus affecting the overall savings.
Consequently, the cooperative was forced to borrow from Banks which lent money at a
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higher interest rate posing an economic challenge. Since then Ufundi Sacco has been
striving to recover from this status quo.
Findings / Observations
i) The Sacco endeavours to recruit a managing Board of individuals with high
integrity with the capacity to mobilize savings and create a safety net.
ii) The Sacco is proactive in wooing back lost customers through sending out
notifications of improvements made.
iii) The Sacco creates strategic partnerships with other financial bodies so as to
enrich member services. Partnership with the Cooperative bank of Kenya
facilitates easy withdrawals from any visa branded ATM.
iv) The Sacco aims at increasing membership through an open bond which
allows members of the public other than civil servants to join and acquire
shares. Further, the Sacco plans to rebrand in order to accommodate a wider
variety of members.
Challenges
i) Lack of proper insurance policy by the Sacco from acts of terrorism like the
bomb blast incident of the year 1998 which rendered recovery, reconstruction
and compensation of members difficult.
ii) Loss of members’ records during the bomb blast incident has made refunds of
members’ savings difficult.
iii) Retrenchment of civil servants which affected the overall savings of Ufundi
cooperative.
iv) Failure of returns remittance by Counties which undermines its collective
income.
CHAPTER THREE
STATUS OF COOPERATIVE SOCIETIES IN KITUI COUNTY
The committee invited and held a consultative meeting with the deputy director of
cooperatives sector, Kitui County. The committee had sought to be updated on the
status of cooperatives in the County, a subject that was the basis for the meeting.The
deputy director engaged members in discussing the following issues:-
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1. Weather Resilient Farming.
i. The sector is involved in supporting youth and women groups taking up farming
activities which are least affected by adverse weather conditions. Bee keeping
and chicken farming being an example.
There are 16 honey production factories fully equipped in the County. The newly
formed chicken farmers Saccos in Nzambani, Kauwi and Township wards are
awaiting certification. The sector has also identified and is working with
potential poultry farmers in Chuluni and Nzangathi ward.
ii. The cooperatives sector is also working with dairy farmers practicing zero
grazing. The Kitui central dairy farmers’ cooperatives being an example. The
sector is also in the process of registering another dairy cooperative in Mwingi
central and Mwingi west Sub-Counties.
2. Alternative businesses
i. The sector has identified citizens in areas with production of building stones and
the residents are in negotiations with the County government to have a stone
crushing machine purchased for the locals.
ii. The sector has also supported organized boda boda operators in formation of
Saccos across the County especially in Kitui Township ward. Saccos have been
formed based on zones in the town with the best performing Sacco being Kwa
Vonza boda boda Sacco.
3. Collapsed Cooperatives
The Cooperatives sector has inherited some collapsed cooperatives from the National
Government. The collapse can be attributed to adverse weather conditions facing our
County. The citizenry practicing agri-business has since been advised to change and
diversify their business operations to those that do not rely on weather conditions as
they wait for adequate rainfall.
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Summary of Cooperative Societies per Sub-County
S. No Sub County Sub - Total
1. Mwingi North 8
2. Mwingi West 3
3. Mwingi Central 14
4. Kitui West 5
5. Kitui Rural 13
6. Kitui Central 22
7. Kitui East 7
8. Kitui South 7
Total 79
Summary of Cooperative Societies Awaiting Registration after Awareness
Creation to the Public
S. NO Sub County Sub - Total
1. Mwingi North 5
2. Mwingi West 3
3. Mwingi Central 2
4. Kitui West 0
5. Kitui Rural 1
6. Kitui Central 3
7. Kitui East 4
8. Kitui South 5
Total 23
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Status of Cooperatives in Kitui County from 1st July, 2013 to 30th June, 2016
SUBCOUNTY WARD NAME OF THE
COOPERATIVE
SOCIETY
TYPE OF THE
COOPERATIVE
SOCIETY
OLD REVIVED NEWLY
REGISTERED
Mwingi North 1.Tseikuru
Ward
1.Tseikuru Women
Sacco
Savings and
Credit (Sacco)
2.Kyuso
Ward
2.Buddies Sacco Sacco
3.Kamuwongo
Bidii Sacco
Sacco
4.Mivukoni
Farmers’
Cooperative
Society
Sacco
5.Kyuso Handicraft
Cooperative
Society
Cereals Marketing
3.Ngomeni
Ward
6.Mikaango
Women Sacco
Sacco
4.Mumoni
Ward
7.Kyambere
Fisheries
Cooperative
Society
Fish Marketing
Mwingi West 1.Kyome/T
haana
Ward
1.Mwingi Small
Holder Farmers’
Cooperative
Society
Horticulture and
Cereals Marketing
2.Kika Women
Sacco
Sacco
2.Migwani
Ward
3.Mwiwe Dairy
Farmers
Cooperative
Society
Producer Milk
Marketing
Mwingi Central 1.Mwingi
Central
Ward
1.Mwingi
Horticulture
Cooperative
Society
Countrywide
Horticulture
Marketing
2.Mwingi Central
Huduma Sacco
Sacco
3.Mwikimamo
Sacco
Sacco
2.Kivou
Ward
4.Mwingi
Mwalimu Sacco
Countrywide
Sacco
5.Baraka Sacco Countrywide
Sacco
6.Mwiscwo Sacco Countrywide
School Workers’
Sacco
7.Juhudi Sacco Sacco
8.Kimwasco Sacco Sacco
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9.Mwingi Traders
Sacco
Sacco
10.Mwingi Bee
Keepers
Cooperative
Society
Producer Honey
Marketing
11.Mwingi
Contractors
Cooperative
Society
Sacco
12.Mwingi Farmers
Multipurpose
Cooperative
Society
Multipurpose
13.Kivou Women
Sacco
Sacco
14.Mutwangombe
Huduma Sacco
Sacco
3.Mui
Ward
15.Mui Traders
Sacco
Sacco
16.Mui Ward
Cohorts Sacco
Sacco
17.Mui Wathimo
Women Sacco
Sacco
4.Nguni
Ward
18.Kalanga
Farmers’
Cooperative
Society
Producer Honey
Marketing
19.Nguni Cohorts
Sacco
Sacco
5.Waita
Ward
20.WaitaWard
Cohorts Sacco
Sacco
6.Nuu
Ward
21.Nuu Ward
Cohorts Sacco
Sacco
Kitui West 1.Mutongu
ni Ward
1.Kitui County
Fruit Processors
Cooperative
Society
Horticulture Value
Addition and
Marketing
2.Malyamu Women
Group
Sacco
3.Mutongu
Multipurpose
Cooperative
Society
Multipurpose
4.Kitui Women
Sacco
Sacco
5.Kitwest Sacco Sacco
Kitui Rural 1.Kisasi
Ward
1.Kisasi Women
Sacco
Sacco
2.Maliku Honey
and Cereals
Cooperative
Society
Producer Honey
and Cereals
Marketing
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2.Mbitini
Ward
3.Mbikisa Sacco Sacco
3.Kanyangi
Ward
4.Lower Yatta
Farmers’
Cooperative
Society
Producer Cereals
Marketing
4.Kwavonz
a/Yatta
5.B2 Yatta
Ranching
Cooperative
Society
Ranching
6.B2 Yatta Staff
Sacco
Sacco
7.Seu Sacco Sacco
8.KV Borders
Sacco
Sacco
9.Friends Borders
Sacco
Sacco
10.Lyscwo Sacco Sacco
11.Kyuusyani
Rural Sacco
Sacco
12.Lower Yatta
Honey and Cereals
Cooperative
Society
Producer Honey
and Cereals
13.Lower Yatta
Multipurpose
Cooperative
Society
Multipurpose
Kitui Central 1.Miamban
i Ward
1.Miambani
Farmers’
Cooperative
Producer Honey
Marketing
2.Kitui
Township
Ward
2.Kitui Teachers’
Sacco
County wide
Sacco
3.Kitui Teachers’
Housing
Cooperative
County wide
Housing
Cooperative
Society
4.Bestrock Sacco County wide
Sacco
5.Kiscwo Sacco County wide
School workers
Sacco
6.Kitui Central
Dairy Farmers
Cooperative
Society
Milk Marketing
7.Kitui Tobacco
growers
Cooperative
Society
Tobacco
Marketing
8.Kitui Horticulture
Cooperative
Society
Horticulture
Marketing
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9.Kitui Central
Women Sacco
Sacco
10.Kaveta bricks
and blocks
Cooperative
Society
Bricks and Blocks
Marketing
11.Kitui Women
Wikwatyo
Multipurpose
Cooperative
Society
County wide
Multipurpose
Cooperative
Society
12.Banana Women
Consumer
Cooperative
Society
Consumer
13.Jaribu Sacco County wide
Sacco
14.Kitui District
Cooperative Union
County wide
Secondary Society
15.Kinathi Sacco Transport Sacco
16.Ebenezzer
Sacco
Transport Sacco
17.Kinatwa Sacco Transport Sacco
18.Kitui Tukutuku
Sacco
Transport Sacco
19.Kicemo Sacco Youth Transport
Sacco
20.Kitui United
Bodaboda Sacco
Youth Transport
Sacco
21.Kitui Motorbike
Sacco
Youth Transport
Sacco
22.Kitui County
Contractors Sacco
County wide
contractors Sacco
23.Kihco Housing
Cooperative
Society
24.Kyangwithya
West Women
Sacco
Sacco
25.AIC Kitui
Wachungaji Sacco
Sacco
Kitui East 1.Sombe/M
witika
Ward
1.Sombe
Multipurpose
Cooperative
Society
Producer Honey
Marketing
2.Zomwi Women
Sacco
Sacco
3.Kiima Women
Sacco
Sacco
4.Kaliku Star
Women Sacco
5.Kina Koni
Women Sacco
Sacco
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6.Kalikuvu
Ranching
Cooperative
Society
Ranching
7.Nguku Farmers’
Cooperative
Society
Poultry Marketing
8.Zamka Farmers’
Cooperative
Society
Producer –
Horticulture value
Addition and
Marketing
Kitui South 1.Mutomo/
Kibwea
Ward
1.Mutomo
Farmers’ Sacco
Sacco
2.Muscwo Sacco Sacco
3.Mutomo Traders’
Sacco
Sacco
4.Kawelu Women
Sacco
Sacco
5.Mwaki Women
Sacco
Sacco
2.Mutha
Ward
6.Mathima
Farmers’
Cooperative
Society
Cereals Marketing
3.Kanziku/
Simisi
7.Kanziku farmers’
Cooperative
Society
Producer Honey
Marketing
4.Athi
Ward
8.Kamaki Farmers’
Cooperative
Society
Producer Honey
Marketing
TOTAL 39 10 48
Challenges facing Sacco Societies in Kitui County:-
The following are challenges facing the Sacco society in Kitui County:-
1. Inadequate capital to meet the ever increasing demand for Sacco loans brought
about by their low loan interest rates as compared to banks. Inadequate capital
further hinders successful operationalization of Sacco societies. This challenge
slows down the ultimate goal of improving the economic and living standards of
Kitui County citizenry.
2. Most Saccos lack adequate and qualified human resource power. This results to
poor maintenance of financial records and general operations which exposes
Sacco members to the risk of losses.
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3. Low savings attitude or lack thereof by potential Sacco members, a case in study
being the transport Saccos. This causes low membership numbers and capital
capacity of Saccos.
Challenges Facing Producer Based Cooperative Societies in Kitui County:-
Producer based Saccos provide development solutions through external financing of
production based industries such as Honey production and horticulture farming.
Examples in Kitui County include Maliku Honey and Cereals Cooperative Society in
Kisasi Ward and Lower Yatta Honey and Cereals Cooperative Society in Kwa
Vonza/Yatta Ward.
1. Inadequate capital reserve by Saccos. This results into difficulties or delays in
prompt payments for their members produce upon delivery.
2. Lack of adequate physical infrastructure like silos, stores, cold storage and office
facilities. Poor storage causes destruction and loss of harvest whereas lack of
office facilities hinders proper business operations of Saccos.
3. These types of cooperatives also face a challenge of acute capacity deficiency in
running the cooperatives operations. Most of them have no employees and the
committees cannot effectively maintain their financial records.
4. Adverse weather conditions; - the agro-based Sacco societies get adversely
affected by the frequent drought spells in most parts of our County. This results
to low harvests and low income which negatively affects the savings capacity of
members.
Challenges facing Ranches and Housing Cooperatives:-
These types of cooperatives provide financial solutions with a target membership of
land developers.
i. Members of these Sacco societies face the challenge of acute encroachment
to their respective land by scam dealers. This poses the risk of loss of money
invested in fraudulent parcels of land.
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CHAPTER FOUR
RECOMMENDATIONS
In order to provide feasible solutions to the earlier stated challenges facing Cooperative
Societies, the Committee made the following recommendations pursuant to Standing
Order No. 190 5 (g).
1. That legislation on a cooperative societies Bill be developed by the County
ministry for Trade, Industry, ICT and Cooperatives or by the County Assembly.
Where, a cooperative development fund will be established so as to provide a
revolving fund where the societies can borrow from and improve on their
working capital.
2. That the Sacco Societies’ members and their staff be capacity built through
regular education and training programs facilitated by the County ministry of
Trade, Industry, ICT and Cooperatives. This will improve their general
capacities and impact a positive savings attitude which will attract more Sacco
membership. Further, a budgetary provision for these trainings should be made
by the Kitui County Cooperatives sector.
3. That the County ministry of Trade, Industry, ICT and Cooperatives is advised to
write and implement more proposals of infrastructure development for Sacco
Societies. For example the dairy and horticulture farmers’ cooperatives who
have had milk coolers and fruit juice processing equipment provided respectively
by our County Ministry through the same initiative.
4. That the County Ministry of Trade, Industry, ICT and Cooperatives collaborates
with the Assembly to support development of the proposed cooperatives
formation model-strategy 247 dubbed “one village one product one cooperative”
This is an initiative envisioned in the Kitui County Integrated Development Plan
(CIDP).
5. That the County Ministry of Trade, Industry, ICT and Cooperatives embarks on
vigorous cooperative business education to all cooperatives in Kitui County. The
citizenry should be sensitized on the importance of business diversification in
the County through planned programs so as to counter the effects of adverse
weather on businesses.
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6. That the County Ministry of Trade, Industry, ICT and Cooperatives should
endeavour to increase the number of licensed Deposit taking Saccos.
7. That the County Ministry of Trade, Industry, ICT and Cooperatives creates
onsite surveillance activities to ensure that licensed Saccos operate with the
prescription of the Act and Regulations.
8. That the County Ministry of Trade, Industry, ICT and Cooperatives creates a
forum where a team of experts from the thriving Sacco’s are invited to interact
with the owners of various thriving business in Kitui County so as to share best
practices as well as create awareness on the importance of forming Sacco
societies.
9. That the Ministry of Culture, Youth and Sports works in close collaboration with
the Ministry of Trade, Industry, ICT and Cooperatives to avoid duplication of
development projects targeted at assisting the women and youth of Kitui County.
CONCLUSION
In conclusion Mr Speaker Sir, the benchmarking exercise was a success and this
committee wishes to affirm its pledge in executing its mandate in accordance to County
Assembly Standing Orders No. 191 (5) and subject to the provisions of Article 185 (3)
of the Constitution.
Mr Speaker Sir, it is in order to note that cooperatives and Sacco societies in Kitui
County are key impactors in uplifting the economic and social well-being of our
citizenry. They are indeed a stepping stone towards business skills development as well
as promoting financial empowerment and self-reliance.
Mr Speaker Sir, With the Successful implementation and achievement of the above
recommendations and initiatives, this committee foresees the Kitui County cooperatives
sector sustaining a good growth momentum. Cooperatives must continue to embrace
new innovations underpinned by technological advancement. Embracing of Sacco
agencies and adoption of ICT solutions are some of the key factors that will sustain
growth within Sacco societies.
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Mr Speaker Sir, this committee greatly commends the County government of Kitui for
its conscious efforts towards attending to matters affecting Sacco society members
especially the women and youth through the ministry of Trade, Industry, ICT and
Cooperatives. It is our sincere hope that the County government shall uphold this noble
task of supporting Sacco societies in Kitui.
We, the honourable members of the Trade, Industry, ICT and Cooperatives
Committee do hereby adopt this report, pursuant to Standing Order 179(6) and
affix our signatures to affirm our approval, confirm its accuracy, validity and
authenticity:-
Member’s Name Signature
1. Hon. Daniel Ngoima Kimanzi ……………………………..
2. Hon. Mary Mbandi ………………………………
3. Hon. Peter Mwikya Kilonzo ……………………………..
4. Hon. Nzuki Wambua ……………………………..
5. Hon. George Souza Kililiku ……………………………...
6. Hon. Rodah Wambua ………………………………
7. Hon. Patricia. K Kimanzi ………………………………
8. Hon. Peter Mutemi ………………………………
9. Hon. Mary Ndumbu ………………………………
10. Hon. Colleta Kimanzi ………………………………
11. Hon. Angela Kanza ……………………………….
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ANNEXURES
Annex 1 BENCHMARKING TRIP PHOTO GALLERY
Annex 2 BENCHMARKING TRIP PROGRAMME
ANNEX 1: PHOTO GALLERY
Figure 1 Fresha Dairy Company
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Figure 2 Committee Members being briefed about Fresha Dairy Company by the
management
Figure 3 Committee members with the C.E.O of the Githunguri Dairy Cooperative
Society
Figure 4 Ngong Butcher's Sacco Building in Rongai Kajiado County
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Figure 5 Committee members in a meeting with the C.E.O of Ufundi Sacco at their
head office in Nairobi City County
Figure 6 Committee members with the management of Absom Motors Ltd
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Figure 7 Maragua Boda Boda Sacco headquarters in Murang'a County
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ANNEX 2: BENCHMARKING PROGRAMME
COUNTY ASSEMBLY OF KITUI
INTERNAL MEMO
OFFICE OF THE CLERK
BENCHMARKING PROGRAMME
COMMITTEE ON TRADE, INDUSTRY, ICT AND CO-OPERATIVES
DAYS NAME OF CO-OPERATIVE
LOCATION
Day 1
15/05/2016
Travelling day Kitui County –
Nairobi County
Day 2
16/05/2016
Fresha Dairy & Githunguri Dairy Farmers
Cooperative Society.
Kiambu County
Day 3
17/05/2016
Ngong Butchers Cooperative Society Ltd Kajiado County
Day 4
18/05/2016
Murata Sacco & Absom Motors Kiambu County
Day 5
19/05/2016
Maragua Boda Boda Sacco Murang’a County
Day 6
20/05/2016
Consideration of the Kitui County Budget
Estimates at Pride Inn Hotel
Nairobi County
Day 7
21/05/2016
Travelling Day Nairobi County –
Kitui County
TEL: (044)22914
Email: [email protected]
Website: www.kituicountyassembly.org/
Clerks’s Office,
Kitui County Assembly,
P.O.Box 694-90200,
Kitui, Kenya.