QUALITIES OF GOOD INFORMATION SYSTEM-SACCOs

Good information system should possess the following qualities:

The co-operative should provide relevant information. Relevance is determined by the user of the information and therefore the management of the co-operative should first define the objectives of the various reports to be produced. Based on the user, the system should generate the following:-

• Detailed daily operational/transactional reports that are accurate for use by supervisors.
• Summarized current and projected information, regardless of whether internally or externally sourced, that is likely to affect performance for use by the managers.
• Highly processed information for strategic planning and management control, obtained from within the co-operative for use by directors and the CEO.

The system should also be designed to generate exceptional reports.

The information should be timely for it to be acted upon. The officer in charge of ICT should review the system constantly to assess its speed and recommend upgrading or replacement.

Information should be free from errors and the user should be notified of any assumptions or estimates.

The co-operative should obtain information from authoritative sources only.

(Excerpt from Chapter 4: Co-operative Society Management and Prudential Guidelines Manual Template-Developed by VAS Consultants Ltd for Department of Co-operatives).

RELEVANT POLICIES FOR CO-OPERATIVE SOCIETIES

Societies are expected to carry out certain business operations according to their established policies.  the purpose of policies is to establish procedures for carrying out certain aspects of the business of the society. the by-law of the society should normally provide and give power to the society officials to formulate such policies as may be necessary from time to time.   Some of the policies relevant to co-operative societies include:

The Loan Policy-this is an internal regulation document that guides and regulates loan granting and loan administration.   The loan policy should be known, understood and adopted by members, as it affects them.

The Investment Policy-A document that guides that society on areas of investment of society’s and members funds

The Human Resource Policy-this is a document that guides the society on issues of administration of human resource, right from recruitment stages to promotion and exit stage..

The Education and Training Policy-this is a document that guides the society on issues of education to members and training of committee members and members of staff.

The Public Procurement and Disposal Policy-this is an internal document that establishes procedures for procurement and disposal of goods and services.   it should be prepared in conformity with the Public Procurement and disposal Act and the regulations made there under.

SECURITY FOR LOANS

Unless the loan applied for is equal or less than a member’s total savings, it must be secured by guarantors. The total shares and deposits of the borrower and those of the guarantors must be equal to or more than the loan applied for.

Why don't we take this relationship to the next level and you lend me some money? :-)

•   The society may still require a member to have his loan application secured by guarantors even though what is applied for may be less than or equal to his savings if those savings have been pledged as security for other members loans.

•   No member will be allowed to guarantee more than three loans. All guarantors must be members of the society.

•   Members of the management and supervisory committee shall not guarantee loans among themselves.

•   The obligation of the previous guarantors shall cease upon change of guarantors subject to the new guarantors being accepted by the society.   the obligation of the guarantors shall also cease when loans guaranteed have been reduced to less than the members total savings.

•   The society shall maintain a record of all guarantors in each members file.

Other Security

•   The society officials approving loans may ask for such additional security as it deems
necessary.    Pledges in the form of articles like share certificates, land title deeds, vehicle log books and insurance policy up to surrender value may be accepted as security.

•   Confirmation as regards the validity of the articles so pledged has to be obtained from the issuing authority before such documents can be accepted as security for a loan.

•   All expenses related to valuation and charging of security shall be met by the applicant.

Procedure for Recovery of Defaulted Loans

In case a loan is not repaid for a month, the society shall inform the borrower/loanee     immediately in writing with copy to each of the guarantors. if no repayment is effected
during the second month, the guarantors shall be informed of this fact and notified that
they will be called upon to honour their obligations if no repayments are effected at the end of three months.  However, the society will still maintain efforts to recover the defaulted loan from the loanee.

Withdrawal from Membership

•   Where a member wishes to withdraw from the society’s membership he may be required to give the society at least 60 (sixty) days written notice of his intention to withdraw.

•   No member shall be allowed to withdraw from the society membership unless the member’s loan is repaid in full or the loan balance can be fully offset by the member’s savings. Such member will also have to satisfy that all loans guaranteed have been paid in full or the balance does not exceed the savings of the members whose loans were guaranteed.

•   A member who voluntarily withdraws from the society membership and wishes to rejoin later will be required to pay a rejoining fee of 2,000.00 to the society.

Amendment

•   the loan policy may be amended by the management committee from time to time, provided that such amendments are communicated to all members before taking effect.

•   Any difficulties encountered in the implementation of this loan policy shall be referred to the management committee for clarification or interpretation.

EXCERPT FROM: Savings and Credit Co-operative Societies; Start-up Kit (Swiss Contact and Department of Co-operatives).

WE ARE 386 ON OUR FACEBOOK PAGE!!

Thanks for joining this page and for visiting the main site. Now we are 386. That's is incredible. We can form a co-operative society a savings and credit type (Sacco), and the law requires only ten people. Only ten!!

CAN WE REGISTER IT?

Lets assume we all want to form a co-operative. We call it Facebook Sacco. Our area of operation is Republic of Kenya. We all agree on postal and physical address of our society. Our common bond is Facebook users who have liked "Co-operative Movement in Kenya" (am sure commissioner won't buy that!!!). The entrance fee/registration fee we all agree to set it at Ksh. 500. We also agree that one share is Ksh. 20 (i.e. nominal value of one share) and the minimum number of shares is 100 and therefore the non-withdwable share is Ksh. 2000 and we set transfer of share fee at Ksh. 200. We all unanimously agree also that our minimum monthly contribution (deposits) should be Ksh. 2000.

If we all pay the entrance fees, we will have Ksh. 193,000. This is more than enough for registration and buying few stationary for our society and also remain with some cash that we can loan to our members! Saccos don't give loans until they are six months old, also members don't qualify for loans until they are six months old and have been contributing consecutively. We are all contributing Ksh. 2000 per month so every month our account will be reading Ksh. 772,000. In six months, we shall have savings of  Ksh. 4,632,000! Now after six months we can loan to few of our members. Of course by then we will have a loan policy that will control loan granting, repayment terms, etc.

Who is not feeling all nice now? Questions?

WHEN AND HOW DO YOU CEASE BEING A MEMBER OF A SACCO?

When do you cease/stop being a member of a Sacco/Co-operative? Many By-Laws state that membership in the society shall cease or deemed to have ceased in regard to any member from the date of:

DON'T STOP BELIEVING IN SACCOs!!

(i) Death

(ii) Withdrawal

(iii) Expulsion

(iv) Being certified to be of unsound mind.

(v) Transfer of shares to another member.

(vi) Failure to remit share contributions and loan repayments for a continuous period of six months without valid reasons or leave of the society.

(vii) Ceasing to hold qualification for membership as specified in these by-laws provided that members who have lost the common bond may retain their membership.

ACCORDING TO INTERNATIONAL CO-OPERATIVE ALLIANCE....

• Worldwide more than 1 billion people are members of cooperatives.
• Cooperatives provide 100 million jobs worldwide, 20% more than multinational enterprises.
• The economic activity of the largest 300 cooperatives in the world equals the 10th largest national economy.

• 

  Money can't buy happiness, however it can rent it :-)

  In India and China combined, more than 400 million people are part of cooperatives.
• In Germany and the United States, one in four people are cooperative members while in Canada that number is four in 10!
• In Japan, 1 out of every 3 families is a member of a cooperatives.
• In Indonesia, cooperatives provide jobs to 288,589 individuals.
• In Kenya, 250,000 people are employed by cooperatives.
• Canadian maple sugar cooperatives produce 35% of the world's maple sugar production.
• In Colombia, the 8,124 cooperatives were responsible for 4.96% of the GDP in 2009. They employ over 137,888 people - 46% of which are men and 54% women.
• In Kenya, cooperatives are responsible for 45% of the GDP and 31% of national savings and deposits. They have 70% of the coffee market, 76% dairy, 90% pyrethrum, and 95% of cotton.
• In Poland, dairy cooperatives are responsible for 75% of dairy production.
• In the UK, the largest independent travel agency is a cooperative.
• In Vietnam, cooperatives contribute 8.6% of the Gross Domestic Product (GDP).
• Costa Rica counts over 10% of its population as members of cooperatives.
• In Germany, 20 million people are members of cooperatives, 1 out of 4 people.
• In Singapore, 50% of the population (1.6 million people) are members of a cooperative.

1)    To observe and operate within provisions of the Co-operative Societies Act, Rules, Society By-law and the various policy documents.

2)    Operate within the budget, and avail the Trial Balances and Economic reports to the respective Government offices.

3)    To provide efficient, timely and quality services to their members.

4)    The members have obligation to elect leaders who are transparent and accountable.

5)    Committee have obligation of providing minutes of Management, Special and Annual General Meetings to the Sub-County Co-operative Officer at all times.

6)    The committees have an obligation to invite the Co-operative Officers to all their meetings.

7)    The society has an obligation to provide accurate, timely and up to date information to the Sub-County Co-operative Officer.

8)    The society has an obligation to pay audit and supervision fee to the Ministry of Industrialization and Enterprise Development Department of Co-operative Development and Marketing.

Related articles

• Meetings in Co-operative Societies (funnyardstick.wordpress.com)
• Suspension and Expulsion of a Member of a Sacco/co-operative (funnyardstick.wordpress.com)
• Duties and Powers of the Management Committee/board of Directors (funnyardstick.wordpress.com)

SHORT HISTORY OF THE CO-OPERATIVE MOVEMENT IN KENYA

The co-operative movement in Kenya was found in the beginning of 20th Century. Africans were allowed to form co-operative societies in the 1950's when they were permitted to grow cash crops. The attainment of independence in 1963 became the turning point in the movement. It has ever since grown in terms of societies membership and share capital/member deposits.

The firs Kenya co-operative society, Lumbwa Co-operative Society, was formed in 1908 by the European farmers with the main objective of purchasing fertilizer, chemicals, seeds and other farm inputs and then market their produce to take advantage of economies of scale. In 1930, Kenya Farmers Association was registered as a co-operative society to take over the role of supply of farm input played by Lumbwa Co-operative Society. The African smallholder farmers fought for formation of their own co-operatives and later in 1950's they were allowed to promote and register co-operatives for cash crops like coffee and pyrethrum. Consequently at independence in 1963, there were 1,030 co-operatives societies with 655 being active with a total membership of 355,000.