Cooperative Movement Shifting Economic Potential

By Soko Directory Team / May 24, 2016

The Cooperative movement in Kenya controls about 43 per of Kenya’s gross domestic product (GDP), the highest proportion in percentage points of GDP attributed to cooperatives in the world. New Zealand comes in a distant second at 22 percent.

The movement provides two million jobs with 70 per cent of Kenyans depending directly or indirectly on cooperatives. “Kenya boasts of about 15,000 registered cooperatives with 12 million members.

Savings and credit societies (Saccos), the fastest growing sub-sector in the movement, have mobilized savings of more than Kshs 230 billion.

The cooperative movement commands 67 and 62 per cent of the total assets and deposits/savings, respectively.

Read: Co-op Bank Q1 2016 Profit Rises to KES 4.94Bn

The greatest contribution attributed to cooperatives in Kenya‘s social and economic development has been in the financial sector, where Saccos and national financial cooperative organizations, Cooperative Bank and Cooperative Insurance Company (CIC), hold substantial savings portfolio accounting for more than 31 per cent of Kenya’s gross national savings.

Since its establishment in 1908, cooperatives have made remarkable progress in sectors, such as agriculture, banking, credit, agro-processing, storage, marketing, fishing, housing and transport, among others.

Kenya’s cooperative sector is reputed to be one of the most regulated in Africa and the best in East Africa.

One out of every five Kenyans is a member of a cooperative. This means at least eight million Kenyans are members of cooperatives while 20 million depend on the movement indirectly.

Kenya is ranked number one in Africa and seventh in the world on the strength of savings in excess of kshs400 billion which is 35 per cent of total savings. Savings and credit cooperative societies (Saccos) have Kshs378 billion deposits.

Cooperative movement history

The cooperative movement became dominant player in the economy of this country just 10 years after Kenya attained its independence.

The movement picked up a fast-growth path in the 1960s and 1970s. Cooperative activities were evident in almost all sectors of the economy, and indeed, co-ops had freedom to venture into any economic activity. They continued to be active in marketing of agricultural produce, agro-processing, property ownership and investments, banking and insurance.

Transport, technology and youth are among the new sectors making tremendous strides in giving enterprising Kenyans an opportunity to create wealth and jobs.

Information technology has been a major driver in the sector’s growth in recent years with the adoption of international accounting and management standards.

Article by Amina Mbuthia.

About Soko Directory Team

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