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.

BECOMING A MEMBER OF A SACCO

All co-operatives in the country have By-Laws that defines the procedure of becoming a member which could be based on the area of operation of the co-operative.

Save and Borrow

QUALIFICATION FOR MEMBERSHIP

1. You have to be within the area of operation of that society that you want to join. This means that you have to be in say Uasin Gishu County or to be more specific Eldoret East District. However the area of operation is defined in the By-Laws of the society. Some co-operatives have a whole country as their area of operation and some don't so find out the area of operation of a society you want to join.
2. You have have to be within the field of membership with a certain defined common bond. That is to say, you can be an employee of a certain company, a member of a certain church or own land or business within the society's area of operation or doing business within the area of operation of the society you want to join.
3. You must be 18 years and over
4. You must be of good character and of sound mind
5. You will also be required to pay an entrance fees and minimum share capital as required by the By-Laws of the society you want to join.

Saccos are a great way of saving and borrowing.

Once you become a member i.e. when you have been presented with membership application form and you being accepted by the society, you will be required to start your monthly contributions immediately which must be consecutive for you to qualify for any loan after usually six months.

Once you sign the membership application form and accepted by the society, you will now be bound by the By-Laws of the society and policies and resolutions of the general meetings of the society. You will be subjected to a fine not exceeding Ksh. 20,0000.00 for any volition of By-Laws.

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?

START SAVING AS SOON AS YOU START MAKING MONEY!

Guys this is important. If you have started earning, this is the right time to start saving or is the right time to increase your savings. The longer you wait the difficult it will become as your life will probably become comfortable and you might have many responsibilities soon afterwards!!

Let me tell you the boiling frog story that I love to tell my fellow cooperators: If you drop a frog in a pot of boiling water, it will of course frantically try to clamber out. But if you place it gently in a pot of tepid water and turn the heat on low, it will float there quite placidly. As the water gradually heats up, the frog will sink into a tranquil stupor, exactly like one of us in a hot bath, and before long, with a smile on its face, it will unresistingly allow itself to be boiled to death. The boiling frog story is generally told in a metaphorical context, with the upshot being that people should make themselves aware of gradual change lest they suffer eventual undesirable consequences (Wikipedia).

See yourself as a frog and of course like the frog dropped in boiling water, you will automatically clamber out like we do in uncomfortable/unpleasant situations. But if you were to be dropped in tepid water and the water be gradually heated, you will rarely notice change in temperature until probably it is too late. Life happens like that!! Change sometimes will find you still trying to adjust to it despite it being constant!!! Life has a way of sneaking onto you and gives you a surprise though most probably you saw this surprise miles away and you told yourself you had all the time. Living life without considerable savings is like water that is being gradually boiled with you in!!!

When you leave collage with your degree or diploma certificate and you get a job, do not wait to start saving. It is likely that at this time you are still single and you have a few financial obligations. So immediately you get a job, you should start saving and save as much as possible. This is so because once you start a family, your expenses will automatically go up or if you delay, you will get used to the pay you get and therefore it will become hard to adjust. You will have established a comfort zone. We all know getting out of a comfort zone is the hardest of things to do.

Saccos have a minimum savings per month that is allowed. So if you are in a Sacco DO NOT start saving the minimum allowed. It is thought wise that one should at least save 10% of his/her income. If possible when you have just been employed, save more than the 10%. It is also wise to save with a Sacco as they pay better dividends and interest on deposit than most financial institutions. Ask around the interest paid by banks on savings accounts then ask what Saccos pay! Saccos pay way better .

So my friends, start saving now for a better future.