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"id": 184708,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/184708/?format=api",
"text_counter": 236,
"type": "speech",
"speaker_name": "Mr. Githae",
"speaker_title": "The Assistant Minister, Office of the Deputy Prime Minister and Ministry of Local Government",
"speaker": {
"id": 159,
"legal_name": "Robinson Njeru Githae",
"slug": "robinson-githae"
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"content": " Mr. Temporary Deputy Speaker, Sir, I beg to second this very important Bill. Before I do that, let me take this opportunity to congratulate the Minister for having been appointed to this Ministry. I have not had a chance to congratulate him. I thought I would do that during the Vote of the Ministry, but I think I now have the opportunity. Secondly, I thank the Minister for requesting me to second this very important Bill. I would also like to commend the staff of the Ministry, the Parliamentary Departmental Committee that dealt with this SACCO Bill at length, all the stakeholders and all those who were involved in the formulation of this Bill. Mr. Temporary Deputy Speaker, Sir, this Bill is long overdue. It should have come yesterday. Why am I saying this? The banks have the Central Bank of Kenya (CBK) which regulates and supervises them. Even the insurance companies have the Insurance Regulatory Authority. The energy companies have the Energy Regulatory Commission. The only body that was lacking was an authority to supervise, regulate and control SACCOs. That is why I am saying that this Bill should have come yesterday. Once this Bill becomes law, all the problems that we have seen bedeviling the SACCOs and Co-operative societies will come to an end. One of the things that the Minister should provide some regulations for is the election of officials, particularly of co-operative societies. It amazes me to see somebody seeking to be an official of a co-operative society, spending millions of shillings in campaigns. I always wonder; the sitting allowance for the best financial co-operative society is about Kshs5,000 per day. So, when you spend million and millions campaigning to be an official, how do those officials recoup their so-called investments. That is because, to them, the campaign is an investment. So, one of the first tasks of the proposed Authority should be to formulate some regulations barring prospective officials from spending so much money. It is clear that if you spend Kshs2 million to become an official of a SACCO, then, clearly, you must find a way of recouping October 9, 2008 PARLIAMENTARY DEBATES 2643 that money. All sorts of things are done to recoup that money. I am saying, Bwana Minister, as soon as you set the Authority, come up with regulations either to specify the maximum amount of money an official should spend on campaigning, or even bar any person seeking an office from spending any money. Let us, for the first time, have people who do not have any money becoming officials. Mr. Temporary Deputy Speaker, Sir, secondly, I would also request the Minister, once we have approved this Bill and the Authority is appointed, to specify some regulations on loans. At the moment, you find that in some tea and coffee SACCOs, a farmer has got eight different loans. The current SACCO by-laws do not look into the ability to repay. You apply for a loan and you are given immediately. What happens is that when the proceeds from tea, for example tea - and we are coming to November when they get bonus - you will find a farmer who has been paid Kshs1 million. But, out of that, the whole amount is recovered as loans. Therefore, the first thing he does in December so that he can buy some chapatis for the family, is to go and borrow money. This is a person who has just received Kshs1 million which has all gone to loans repayments. So, there should be some regulations on ability to repay. Some minimum money should be left to the farmer and everything should not go towards loans repayments. If we do that, we will be doing a service to our farmers. We must regulate them because the SACCOs have refused to regulate themselves. They just loan farmers any amount of money they want. Thirdly, I think we should also come up with some regulations. It amazes me when I see some tea SACCOs taking their officials and employees to Mombasa for a visit. I have been to Mombasa and I have never seen tea being grown there? But you find they always go to Coast Province for a study tour. I have always said that, if they really want to have a study tour, why not go to Kericho? It makes more sense. I do not understand what tea SACCO officials go to Coast Province to study. Maybe, they study something else but not tea. So, we should have some regulations that bar officials from tours that do not benefit our farmers. Mr. Temporary Deputy Speaker, Sir, another very serious problem at the moment is where you try to intervene in private SACCOs where Members of Parliament are not involved. For example, take the case of Kenya Tea Development Authority (KTDA) factories. When they have problems, they want Members of Parliament to intervene. But when they do not have problems and Members of Parliament want to know their operations, they say they are private companies. It requires an annual general meeting (AGM). So, once that Authority has been gazetted, that issue will no longer be applicable. The Authority will have powers to regulate and license all the SACCOs. So, their defence that they are private will no longer apply. Mr. Temporary Deputy Speaker, Sir, the Authority should also formulate some regulations barring SACCOs from investing in some ventures that do not benefit members. We have seen SACCOs buying land which stays idle. They pay rates on land that they do not get anything. I think there should be some regulations barring them from entering certain ventures such as buying of immovable property and developing houses. That is not the core business of SACCOs. The core business of SACCOs is to lend money to their members. So, there should be some regulations barring SACCOs or giving certain conditions under which they can invest in other activities, rather than lending of money. Mr. Temporary Deputy Speaker, Sir, one thing that I liked about this Bill is the Deposit Guarantee Fund. This is wonderful provision. What is happening is that SACCOs misuse money and when members retire or are retrenched, they cannot get their shares. Even worse, there are some SACCOs which do not insure the loans given to members. So, after a family has lost a bread- winner, some SACCOs still write demand letters to same, same families that are mourning the lose of their beloved ones. I am glad to see that, that will be a thing of the past. My only quarrel - and I am glad to see the top officials of the Ministry are here - is the 2644 PARLIAMENTARY DEBATES October 9, 2008 Kshs100,000 that SACCOs would be guaranteeing. An amount of Kshs100,000 has been overtaken by events. If you look at most co-operative societies, you will find that even the most junior employees have, at least, Kshs300,000 shares. So, when you say that you are going to guarantee only Kshs100,00 in case of liquidation of a co-operative society, then a lot of the other money will not be guaranteed. I would request that you come up with a higher figure. A sum of Kshs100,000 is on the lower side. Probably a sum of Kshs300,00 would suffice if you cannot go to Kshs500,000. I know that even the Central Bank of Kenya is in the process of increasing the amount that is guaranteed by the Deposit Protection Fund. So, instead of waiting to amend this section afterwards, I would request the Minister to come up with an amendment to increase the amount. An amount of Kshs100,000 is on the lower side, considering the inflation that we are currently experiencing. The future of Kenyans lies in co-operative societies and so we must support them. That is where you go to get some money to pay for maternity bills for your wife. Also, when you have a problem, that is where you go to get some money. So, the future of this country depends on how well we run these SACCOs. They should be in a position to give you emergency loans immediately. Mr. Temporary Deputy Speaker, Sir, allow me to commend the Bunge SACCO. I think it must be one of the most efficient SACCOs where when you borrow money at 10.00 a.m, in the afternoon you will have your cheque. That is what other SACCOs should try to emulate. I would like to thank the officials of the Bunge SACCO for taking care of its members."
}