The government is working to ensure that cooperatives can access favourable credit facilities while building capacity to manage debt effectively.
Speaking in Mombasa during a cooperative leader conference, the Cabinet Secretary for Cooperatives and Micro Small and Medium Enterprises (MSME) Development, Wyclifee Oparanya, said that one key reform is the introduction of a Deposit Guarantee Fund as part of the proposed amendments to the SACCO Societies ACT.
Oparanya said that the fund will help in protecting members’ savings, enhance financial stability and strengthen confidence in the cooperative sector.
Among other reforms is the integration of digital lending platforms into the cooperative sector, which will enable cooperatives to offer secure, efficient and accessible financial services, especially in regions that have traditionally been underserved.
In an effort to ensure effective risk management, Oparanya highlighted the government’s dedication to equipping cooperatives with the tools and knowledge to manage financial and operational risks smoothly.
“By adopting sound financial management practices, cooperatives will be better prepared to navigate market fluctuations, inflation, and other economic challenges,” he said.
He further noted that to stay competitive, cooperatives must embrace technology; hence, the government remains committed to supporting the digital transformation of cooperatives through the adoption of mobile banking loans and other digital financial products.
However, as the adoption of digital platforms requires much vigilance, the CS reiterated that cybersecurity must be a priority; hence, the government is ensuring that cooperatives are equipped with the necessary measures to protect their members’ data and assets.
The ministry has announced preparations to celebrate the International Year of Co-operatives 2025 in July.
Addressing the media at the Cooperatives Insurance Company (CIC) Group national cooperatives leaders’ summit 2025, CS Oparanya said the United Nations has declared 2025 as a year of cooperatives; thus, all governments have to focus on the corporate model of development.
“Kenya is leading the cooperatives movement in all of Africa and is ranked 8th in the world so we are doing very well but we cannot just stop there; we strive to do better and that’s why we are here today,” added Oparanya.
Themed “promoting sustainable cooperative enterprises”, the 3-day event seeks to discuss the various challenges that are currently facing the cooperative sector, including governance and policy reforms, among others.
According to the CS, the government is working closely with industry stakeholders to provide cooperatives with the knowledge and resources needed to maintain robust cybersecurity practices.
He asked cooperatives to take advantage of the East African Community now that there are eight countries to expand their business across borders.
He stressed the need for stakeholders to treat cooperation as a business and invest in it to make a profit and declare dividends to the shareholders in that particular range.
He added that they should also major in Micro Small and Medium Enterprises (MSMEs) started by members as a side hustle.
“This will be helpful when you retire or your family will be running that business. It is only through small businesses that we will be able to create more jobs for our family and other people,” said Oparanya.
He urged cooperatives to support each other in the business with the help of the government, which is ready to deliver its mandate.
You can work in collaboration with the three branches of government. Educate them so that they understand and will be able to support your business because they understand the issues better. When they understand from you people, it is much easier to internalise,” he said.
He gave an example of the neighbouring country Uganda, which has embraced the cooperative movement at the village level, saying the Kenyan government is ready to support the move once the cooperatives embrace it by involving the grassroots people to be able to start MSMEs.
The CS noted that the ministry will also make sure there are proper statuses, legislations and policies so that the sector can be strengthened to meet the challenges of our time.
“Cooperatives are key players in the government’s Bottom-up economic transformation agenda by empowering communities at the grassroots level. Cooperatives ensure the benefits of development reach everyone, especially those underserved areas,” he said.
He noted that the Cooperatives society Bill 2024 is a reform that will reduce provisions that require cooperative leaders to meet higher education standards and competence.
Introduction of the guarantee fund, which will help protect members savings, enhance financial stability and offer secure, efficient and acceptable financial services.
By Chari Suche and Nuru Soud
