How graft in Kenya's cooperative societies threatens livelihoods

“To manage what is common with virtue is to honour justice; to corrupt it for personal gain is to betray both reason and community”- Inspired by stoic principles.

Now, leading or managing shared affairs honestly supports justice, while exploiting them for selfish reason is both irrational and harmful to society. This is the opposite of what happens in the cooperative movement in Kenya. 

Kenya’s cooperative movement, once hailed as a beacon of financial inclusion and economic empowerment, is teetering under the weight of mismanagement and corruption. With over 14 million members and control of more than Sh1 trillion in assets, cooperatives should be pillars of community growth. Instead, they are becoming cautionary tales of lost hope, savings, shattered trust, and failed governance.

Behind the alarming collapse of several cooperatives lies a systemic failure in leadership and internal controls. Cooperative officials often operate with unchecked powers, pushing decisions without adequate consultation and suppressing dissent from ordinary members. Elections are sometimes rigged, financial records obscured, and boardrooms transformed into enclaves of patronage.

The dramatic failure of Ekeza Sacco is a clear demonstration, which left thousands of members financially paralysed. Its downfall is not an isolated case, but a symptom of a broader governance cancer spreading within the sector. There is Shirika Housing cooperative society, currently manoeuvring through mismanagement and corruption. 

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This is despite the fact that Shirika housing cooperative society draws its membership from trained cooperative officers who have the onus of supervising and directing the cooperative movement.

Recently, the commissioner for cooperatives released a damming inquiry report which accused management of Shirika Housing cooperative society for failing to account for Sh100 million during an Annual Delegates meeting. The inquiry report also cited poor corporate governance and illicit investment decisions. This shows there are existing legal supervisory legal mechanism, but enforcement remains inconsistent. Regulatory interventions often arrive too late—after members raise alarm or damage is done.

For many, these savings represent years of sacrifice. Loss of funds translates into lost homes, missed school fees, untreated illnesses, and enduring financial trauma.

Despite these challenges, the cooperative sector can be salvaged. But this requires urgent reforms:

Governance Overhaul
Enforce transparent leadership elections, limit board tenures, and implement training programs on accountability and financial management.

Empowered Regulation
Equip SASRA with more resources and autonomy. Regular mandatory audits must be made public, and legal action against mismanagement should be swift and visible.

Member Empowerment
Introduce mandatory financial literacy programs to help members understand their rights, monitor their cooperatives, and demand accountability.

Depoliticisation
Cooperatives must remain independent of political agendas. Safeguards are needed to prevent leaders from exploiting these institutions for campaigns or favours.

The writer is a lecturer in social sciences, a journalist and former cooperative officer