Government Fast-Tracks New Cooperatives Law to Strengthen Governance, Protect Savings and Drive Economic Growth

By Wasike Elvis

The government has intensified efforts to overhaul Kenya's cooperative movement through a new law that is expected to strengthen governance, improve accountability, protect members' savings and position cooperatives as key drivers of the country's economic transformation.

Deputy President Kithure Kindiki has announced that the proposed Cooperatives Bill is on course to become law within the next month, saying President William Ruto is expected to assent to the legislation once it completes the parliamentary process.

Speaking during the 104th Ushirika Day celebrations held at Uhuru Park in Nairobi on Saturday, Prof. Kindiki described the proposed law as a major milestone in reforming one of Kenya's most important economic sectors, which serves millions of citizens through savings and credit societies, agricultural cooperatives, housing cooperatives and marketing unions.

According to the Deputy President, the new legislation is intended to modernize the cooperative sector by introducing stronger governance structures, increasing transparency and accountability, embracing digital technologies and enhancing members' confidence in cooperative institutions.

"Within a month, the Bill will be signed into law by the President so that we can modernize this sector, improve transparency and governance as well as make it digitally conversant," Kindiki said.

The Deputy President noted that cooperatives have remained at the centre of Kenya's socio-economic development for decades, helping ordinary citizens mobilize resources, access affordable financial services and improve their livelihoods.

He said the Kenya Kwanza administration recognizes the strategic role played by cooperatives in empowering communities and has therefore made the sector one of the pillars of the Bottom-Up Economic Transformation Agenda (BETA).

Kindiki pointed to the establishment of a standalone Ministry of Cooperatives and Micro, Small and Medium Enterprises (MSMEs) Development as a demonstration of the government's commitment to revitalizing the movement and unlocking its full economic potential.

"The establishment of a dedicated ministry reflects the seriousness with which this administration treats the cooperative sector and its role in driving inclusive development," he said.

The Deputy President explained that the Cooperative Bill, together with ongoing reforms targeting Savings and Credit Cooperative Societies (SACCOs), seeks to restore and strengthen public confidence in the sector by promoting sound management practices and safeguarding members' deposits.

He noted that more than eight million Kenyans currently save through SACCOs, with deposits exceeding KSh1 trillion, making the sector one of the country's largest mobilizers of domestic savings.

According to Kindiki, strengthening regulation and governance will ensure that members' savings remain secure while improving the overall efficiency and sustainability of cooperative institutions.

"The Cooperatives Bill currently before Parliament, alongside the ongoing SACCO reforms, will reinforce public confidence by promoting sound governance and protecting the savings of the more than eight million Kenyans who have entrusted SACCOs with deposits exceeding KSh1 trillion," he said.

He observed that as the cooperative movement continues to expand, there is an urgent need for a modern legal and regulatory framework capable of addressing emerging challenges while supporting innovation and technological advancement.

"Our goal is to build cooperative institutions that are transparent, financially sound, professionally managed and resilient enough to drive inclusive economic growth and support the successful implementation of the Bottom-Up Economic Transformation Agenda," he said.

Kindiki praised the contribution cooperatives have made in transforming lives across the country, saying they have enabled farmers to access better markets and improve agricultural production while giving workers and entrepreneurs affordable access to credit.

He noted that through cooperative societies, many Kenyan families have managed to educate their children, build homes, establish businesses and improve household incomes.

"Through various cooperative entities, farmers have improved production and secured better markets, workers have mobilized savings and accessed affordable credit, while families have educated their children, built homes and established businesses," he said.

The Deputy President also challenged cooperative leaders to embrace professionalism, transparency and innovation to ensure the movement remains competitive in a rapidly changing economic environment.

He emphasized that good governance would be critical in restoring public trust and attracting more members into cooperative societies.

Recognizing the need to prepare cooperatives for the future, Kindiki called for greater participation of young people and women in both membership and leadership positions.

He said youth involvement is essential in ensuring the sustainability of the movement, particularly as Kenya seeks to create employment opportunities for its growing youthful population.

"We must encourage the youth to keep this tradition of joining the cooperative movement to be able to succeed in business and other ventures," he said.

Kindiki further observed that cooperatives can provide young entrepreneurs with an opportunity to pool resources, mobilize capital, establish enterprises and create employment rather than relying solely on formal jobs.

"They remain one of the most practical pathways for addressing youth unemployment by enabling young people to organize themselves, mobilize capital, establish enterprises and become creators of jobs rather than seekers of jobs," he added.

The Deputy President said the government expects cooperatives to play an even bigger role in implementing flagship national programmes, including increasing agricultural productivity, supporting micro, small and medium enterprises, expanding affordable housing, promoting Universal Health Coverage and accelerating Kenya's digital transformation.

He noted that a stronger cooperative sector would contribute significantly to economic inclusion by ensuring that more Kenyans participate directly in wealth creation.

Kindiki also applauded members of SACCOs and cooperative societies for fostering a strong savings culture and contributing to national development.

He pledged to advocate for increased budgetary allocations to the Ministry of Cooperatives and MSMEs Development in order to strengthen the sector further and support the government's plan to increase cooperative membership beyond the current 14 million members.

"We thank the members of SACCOs for developing a savings and productivity culture and taking part in national development. I look forward to greater development in our country with the cooperatives sector playing a bigger role," he said.

Cabinet Secretary for Cooperatives and MSMEs Development Wycliffe Oparanya echoed the Deputy President's remarks, saying the ministry has embarked on comprehensive reforms aimed at strengthening cooperative societies and enhancing their contribution to the country's economy.

Speaking during the celebrations held under the theme "Cooperatives for a Peaceful World," Oparanya said the Cooperative Bill is currently at the mediation stage in Parliament, bringing it closer to enactment.

He added that the ministry has also proposed amendments to the SACCO law to improve governance standards, strengthen accountability, encourage innovation and build more resilient cooperative institutions capable of responding to emerging economic challenges.

"As the Ministry of Cooperatives and MSMEs Development, we have undertaken far-reaching reforms to strengthen the cooperative sector and enhance its contribution to national development," Oparanya said.

The Cabinet Secretary further highlighted ongoing efforts to revive Kenya's coffee industry through stronger and better-managed coffee cooperative societies.

He said the reforms are intended to ensure farmers receive better returns for their produce, improve productivity and create sustainable livelihoods for coffee-growing communities.

According to Oparanya, revitalizing agricultural cooperatives remains a key priority because they continue to serve as the backbone of rural economies and household incomes.

He maintained that a vibrant cooperative movement remains one of the country's most effective vehicles for wealth creation, job creation and poverty reduction.

The 104th Ushirika Day celebrations brought together senior government officials, cooperative leaders, development partners and thousands of cooperative members from across the country to celebrate the movement's achievements and discuss its future.

As Parliament finalizes consideration of the Cooperative Bill, the government says the reforms are expected to usher in a new era for Kenya's cooperative movement by strengthening governance, improving service delivery, embracing digital innovation and ensuring cooperative societies remain sustainable institutions capable of supporting millions of Kenyans while driving inclusive national development.