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The Kenyan Senate has initiated a public consultation process for the Cooperative Bill 2024.
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The Cooperative Bill 2024 aims to create a governing structure for every cooperative operating in Kenya.
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The proposed legislation suggests imposing a penalty of KSh 500,000, or possible incarceration, or both on anyone or any entity utilizing the cooperative name without proper registration.
Elijah Ntongai, who works for .co.ke as a journalist, boasts over four years of experience in researching and reporting on finance, business, and technology. He offers valuable perspectives on both local Kenyan developments and international trends.
Nairobi – The Kenyan Senate is currently reviewing the Cooperative Bill 2024, aimed at establishing an extensive regulatory structure for all cooperatives within the country.
The legislation proposed by the Majority Leader in the National Assembly, Kimani Ichungwah, was reviewed and sent to the Senate by the Members of Parliament.
Protection of cooperative identity
A provision within the legislation aims to safeguard the cooperative identity by limiting the usage of terms such as “Cooperative” and “Sacco” exclusively to organizations officially registered under these designations.
The proposed legislation states that using these terms without authorization would be deemed an offense, subjecting offenders to penalties including a maximum fine of KSh 500,000, a potential prison sentence of up to five years, or both. The intention behind this action is to stop non-registered organizations from deceiving the public by claiming to be cooperatives.
SACCO naming conventions
The Cooperative Bill 2024 aims to establish a comprehensive naming system applicable to various types of cooperatives such as matatu Saccos, savings and credit cooperatives, and investment cooperatives.
The legislation requires cooperatives to use particular naming conventions that signify their roles and guarantee transparency for both members and the general populace. Important stipulations encompass:
- Savings and Credit Cooperatives (Saccos) are required to incorporate the term “Sacco” in their titles and conclude with the word “Limited.” An illustration would be “Nairobi Teachers Sacco Limited.”
- Investment cooperatives are required to incorporate the terms “savings and investment” or the abbreviation “SICO.” For instance, Kenya Farmers Savings and Investment Cooperative Limited or Kenya Farmers SICO Limited.
- Transport cooperatives like Matatu SACCOs should incorporate the term “transport” or the acronym “TRANS-COOP” into their titles; for instance, Lopha Matatu Transport Cooperative Limited.
- Secondary cooperatives should have the term “Secondary” placed before “Cooperative,” and cooperative federations should have the term “Federation” positioned after “Cooperative.” For instance, this would result in names like “Kenya Dairy Secondary Cooperative Limited” or “Kenya Dairy Cooperative Federation Limited.”
The legislation is presently being examined by the Senate. Should it be approved, co-ops will undergo a transitional phase to adhere to the revised nomenclature requirements.
The Senate encourages public involvement in reviewing the Cooperatives Bill 2024.
Previously, .co.ke highlighted that the Senate had called for public input regarding the Cooperative Bill 2024. This bill aims to create a clear and accountable structure for overseeing and managing SACCOs under a decentralized government system.
The Senate Standing Committee on Trade, Industrialization, and Tourism has requested written contributions from the general public by March 18, 2025, as stipulated under Article 118 (1) (b) of the Constitution.
The public engagement program comes after the initiation of inquiries into a KSh 13 billion controversy surrounding the Kenya Union of Savings and Credit Cooperatives (KUSCCO). The objective of this bill is to improve supervision and safeguard members from mismanagement issues.
