Government will formally request Parliament to drop amendments it is fast-tracking to review legislations governing the multibillion co-operative sector.
Acting Industry principal secretary Chris Kiptoo said Statute Law (Miscellaneous Amendments) Bill of 2018 will be recalled to enable more stakeholder participation.
The Bill proposes amendments to the Co-operative Act, CAP 490 and the Sacco Societies Act, CAP 490.
The two legislations are among other laws governing the cooperative sector that the government is reviewing.
“As a government we acknowledge that the sector players were not widely consulted. Industry Cabinet secretary Peter Munya will write to Parliament requesting it to drop the Bill to allow intensive public participation to be carried out,” said Dr Kiptoo.
The Bill proposes review of the Co-operative Act, CAP 490 to introduce social impact members (SIM). The new class of members will be created at an annual general meeting of co-operative society subject to approval by the cabinet secretary in charge of cooperatives.
Kenya Union of Savings and Credit Co-operative Ltd (Kuscco) managing director George Ototo said these proposals are of grave concern to the sector, since they will distort the co-operative governance structure and create a second centre of power beyond reproach within the saccos.
“We fear that the secrecy from these special impact members who are not accountable to other members, may facilitate corruption, by ignoring transparency, which is expected in all financial institutions,” said Ototo.
The new class of members will be exempted from payments made by other members of the cooperative society which is in violation of the third cooperative principle on ‘economic member participation’ requiring that members contribute equitably to the capital of their cooperative.
The Sacco Societies Act once amended will allow introduction of a special fund with its own advisory board, investment committee, special fund investment policy and special fund trustee which have been proposed as amendments in the Sacco Societies Act.