Cak Calls On Members To Transform Kenyas Trillion-shilling Cooperative Movement

By Admin

Kenya’s cooperative movement—one of the largest and most influential in Africa—now boasts assets valued at over Sh1.5 trillion. Yet despite this impressive scale, the sector finds itself at a critical turning point, according to Co-operative Alliance of Kenya (CAK) chairman McCloud Malonza. Speaking during this year’s National Cooperative Forum, Malonza urged the movement to reflect deeply on its current trajectory and take bold steps to secure its future.

The 2025 Theme: A Call for Immediate Action

He anchored his remarks on the 2025 theme, “Shaping the Future of Cooperatives: Leadership, Innovation and Sustainable Growth.” Malonza explained that this theme should not be interpreted merely as a slogan or a visionary statement meant for tomorrow. Instead, he framed it as a direct and urgent call to action—one that demands immediate commitment from leaders across the cooperative ecosystem. “When we talk about the future, we are not referring to a far-off horizon,” he said. “The future is the immediate tomorrow, and the work of shaping it must begin today.”

The Centrality of Leadership in Cooperative Transformation

The chairman noted that although cooperatives have historically been pillars of economic empowerment, especially at the grassroots level, recent incidents of mismanagement and governance lapses have placed the sector under scrutiny. He emphasised that leadership remains the most decisive determinant of the sector’s direction. For cooperatives to thrive in a rapidly evolving financial environment, superficial or symbolic leadership is no longer sufficient. The movement requires knowledgeable, accountable and adaptive leaders who can anticipate challenges, make informed decisions and steer institutions responsibly.

Outdated Governance Structures and the Need for Reform

According to Malonza, many governance structures within cooperatives were designed decades ago, long before digital integration, regulatory reforms and global financial interconnections became the norm. As a result, some cooperatives are still operating with systems that are simply not equipped for today’s realities. He warned that institutions that fail to update their governance frameworks risk falling behind, or worse, collapsing under the weight of modern financial pressures. “A cooperative cannot grow beyond the quality of governance that guides it,” he said. “We must elevate governance from basic compliance to a culture characterized by professionalism, competence and uncompromising integrity.”

Capacity Building and Clear Governance Roles

To achieve this transformation, Malonza called for continuous capacity-building programs for board members and senior managers. He argued that boards must not merely occupy positions of oversight but should possess a deep understanding of financial management, risk mitigation and strategic development. He insisted that the separation between policy direction and daily operational management must be clear and respected. When governance interferes with management—or vice versa—the result is confusion, weakened accountability and poor decision-making.

Building Resilience in a Modern Cooperative Landscape

A key pillar of his message was resilience. Malonza urged cooperatives to build institutional resilience through deliberate planning and prudent financial strategies. He encouraged SACCOs and other cooperatives to create dedicated reserve funds specifically for technological upgrades. In an era where digital innovation is transforming everything from member registration to loan processing, cooperatives that fail to invest in technology will struggle to compete. He also advised institutions to diversify their investment portfolios as a buffer against economic uncertainties, noting that over-reliance on a single revenue stream exposes members to avoidable risks. “Good governance is the foundation,” he explained. “But resilience is the protective wall that ensures stability even in turbulent times.”

Taxation and Regulatory Challenges

Malonza was equally vocal about the regulatory challenges affecting the cooperative sector, particularly around taxation. He described the current tax environment as one of the biggest pain points for SACCOs and cooperatives across the country. Many institutions, he said, are burdened by an unclear and sometimes punitive tax regime that treats cooperatives as if they were profit-driven corporations. This approach, he argued, fails to recognise the unique role of cooperatives as member-owned, member-driven institutions whose core mandate is not profit maximisation but social and economic empowerment. He urged policymakers to adopt a more supportive framework that reflects the distinct nature of cooperative enterprises and enables them to grow sustainably.

Innovation as a Driver of Growth

Beyond governance and taxation, Malonza highlighted the importance of innovation as a driver of future growth. He pointed out that technology should not be viewed merely as a tool for convenience but as an enabler of efficiency, transparency and credibility. Digital platforms, he noted, can help improve record-keeping, enhance member engagement, streamline service delivery and strengthen internal controls. He encouraged cooperatives to adopt modern systems such as automated loan processing, mobile-based banking services, digital member portals and data-driven decision-making tools.

The Importance of Strategic Foresight

He also stressed the need for strategic foresight—an essential leadership quality in a competitive and unpredictable economic landscape. Strategic foresight, he said, allows boards and managers to anticipate emerging risks, identify new market opportunities and position their institutions for long-term sustainability. “Fiduciary duty must be matched with financial literacy,” he cautioned, reminding leaders that their decisions carry real implications for millions of members who depend on cooperatives for savings, credit and livelihood support.

A Call to Reinvent and Strengthen the Movement

The CAK chairman concluded by reminding the sector that its collective strength lies in unity, responsible leadership and a shared commitment to safeguarding members’ interests. The cooperative movement, he said, has immense potential to catalyse national development, reduce poverty and enhance financial inclusion. But for this potential to be realised, cooperatives must reinvent themselves—strengthening governance, embracing innovation, investing in resilience and advocating for a fair regulatory environment.

In Malonza’s words, “Our movement stands at a crossroads. The choices we make today will determine the Kenya we build tomorrow.”