Curbing the mismanagement of co-operatives in Kenya


An increasing number of savings and credit co-operatives (SACCOs) across the region are slowly dying off due to mismanagement, embezzlement of funds and lack of qualified staff, as a result Co-operative Bank is on a quest to revive these SACCOs.

SACCOs are intended to offer an alternative way to improving the situation in low-income countries. They are community membership based financial institutions that are formed and owned by their members and promote their economic interests.

Participants are able to transact among themselves while remaining competitive and relevant, according to Co-operative Bank.


“The corporate movement initially, from 2000 was faced with a myriad of challenges, mismanagement, skill gaps, technical capacity, that’s when our Co-operative Bank (which is 65 per cent owned by the Co-operative Movement) came in and started a… subsidiary company called CCIA (Co-op Consultancy and Insurance Agency) to revive and make sure that these cooperatives are making money and really helping their community,” said Peter Kirugu, head of SACCO Banking.

The co-operations are prone to mismanagement and embezzlement according to Kirugu because they are led by numbers and do not have the technical capacity.

“Basically they don’t know how to run these institutions so Co-operative Bank through CCIA, come in handy to train them, manage them, help them to build up the skill gaps, to support them with capacity and even the technical capacity,” he said.

CCIA helps make this affordable and accessible for people while training them and hiring qualified people.

“We have CCIA because it is like social corporate responsibility, when it was formed we found that there is a missing gap in terms of how we support these guys, they don’t have money, they don’t have funds and we offer them free services to revive them,” said Kiguru.

The majority of these SACCOs, according to Kiguru have come up strongly and some of them are becoming big banks with big capitals after the process so the Co-operative Bank is pleased with the progress.

“CCIA is really supporting to train them, we are there to build capacity and have done it over the years, from 2002 up to date, they have walked with us and they are perfect now.”

Kiguru addressed the perception that it may be seen as a takeover, stating that was not the case.

“They assist people to hire their own people and they guide them to increase production”  for example farmers can now can get their funds, they can get money easier now than before, they are able to empower the community around,” so basically we walk with them from zero to somewhere.”