COUNTY GOVERNMENT OF KITUI COUNTY ASSEMBLY OF KITUI … · 2017. 4. 4. · SASRA Sacco Societies...

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



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



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



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.



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;



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.



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.



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.



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


Cooperatives In Kenya.

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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.


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.


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.


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.


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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2

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.

mailto:[email protected]

http://www.kituicountyassembly.org/

COUNTY GOVERNMENT OF KITUI COUNTY ASSEMBLY OF KITUI … · 2017. 4. 4. · SASRA Sacco Societies...

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