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{
"id": 184710,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/184710/?format=api",
"text_counter": 238,
"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"
},
"content": "The future is, indeed, in co-operative societies. As soon as the Authority is formulated, it should come up with basic minimum services, for example, the provision of ATMs. I know it is only the major SACCOs that have the ATMs. However, if the Authority was to assist the SACCOs, then they would come up with an alternative like the Kenswitch which the banks are using. We could have SACCOswitch for the co-operative societies. Every SACCO would then have an ATM. If you go to the banking hall at Harambee SACCO, you will realise that it is so crowded. If they had ATMs, the banking halls would be less crowded. Once this Authority is in place, the Minister should provide for a common ATM. That will really help members of SACCOs. Mr. Temporary Deputy Speaker, Sir, another issue which the Authority will need to work on is the employment of relatives in SACCOs. You will find that after every change of management, the new management seems not to recognise the employees who were employed by the previous management. So, they become stagnant giving all sorts of excuses but, basically, it is because they want to employ their own people. They must be told that those employees are innocent, whichever way they were employed. They should be recognised. The new officials should not try to sack the old employees so as to employ new ones. That is one of the things that should be communicated. One area that the Authority should be so strong on is the issue of deductions. Some companies and even local authorities -I am talking from experience - deduct their employees money, but they do not remit it to their respective SACCOs. The effect of that is that the employee loses on both fronts. His money has been deducted, yet again he cannot benefit from the SACCO because he cannot borrow money based on the shares he has contributed. The Authority should take action on companies and local authorities which engage in this very dishonourable act. It really hurts the SACCOs. We must also commend the Co-operative Bank of Kenya Limited for their proposed IPO. It is an eye-opener. We have huge SACCOs that are even larger than banks, for example, the Harambee Co-operative Society. If you look at its deposits, loans and the turnover, you will realise October 9, 2008 PARLIAMENTARY DEBATES 2645 that it is bigger than almost 50 per cent of banks in Kenya. There should be a provision where even SACCOs could have IPOs so that Kenyans can also invest in them. That will revolutionise the SACCOs. It will make them professional. Mr. Temporary Deputy Speaker, Sir, another thing I have liked about this Bill is that for the first time, every SACCO shall be required to have an external auditor. We have attended AGMs where accounts have not been audited by an external auditor. Most times, it is an employee or the manager who has supposedly audited those accounts. I am glad to see that it is going to be compulsory for the SACCOs to have external auditors. Unfortunately, in the Bill, the qualifications of who can be appointed an external auditor are not there. That needs to be done through subsidiary legislation so that we can approve certain categories of audit firms that can be appointed external auditors. Finally, one of the things that really used to put people off SACCOs is that if you wanted to be attended to, you would find the SACCO offices closed. You would find a small notice reading thus: \"Closed for Stock-Taking\". I am glad that now, under Clause 64, once a SACCO has been licensed, it must operate on all working days. If it has to close, the authority of the Minister must be obtained so that the SACCO members know. Can you imagine going to the bank on a working day only to find it closed? That is what used to happen with our SACCOs. I am glad that has now been taken care of. They must now open on all working days. If they have to close, they must obtain the Minister's authority. However, there should be a provision where once a Minister has approved for a particular SACCO to close on a particular day, that information must be published in the newspaper so that members know that the SACCO will be closed. We need to reassure banks. This is because they have not been very supportive of the SACCO Societies Bill. They say that SACCOs are going to take business from them. Under Clause 32, the fears of the banks have been taken care of. This is because SACCOs have been prohibited from accepting third party cheques, opening current accounts, engaging in foreign trade, investing in equity and so on. Really, the banks have no reason to fear the SACCO Societies Bill. The ones who have been campaigning--- I have seen and received letters - I think most hon. Members have received them too - from banks telling them not to support this Bill. We need to tell the banks that their interests have been taken care of. SACCOs will not be in competition with banks. They will only be complementing banks. Mr. Temporary Deputy Speaker, Sir, we have also seen a very bad side of some SACCOs. They do not have money from the members. So, they go to the banks and borrow money at 15 per cent. They lend the same money at, say, 17 per cent or 18 per cent. This defeats the purpose of SACCOs which is to give low interest rates to the members. The Minister has authority to prohibit SACCOs from borrowing money from banks because it does not make any sense for a SACCO to borrow money at 15 per cent and then lend it out to members at 18 per cent. The members may as well go directly to the bank and borrow money at 15 per cent. That would defeat the purpose of the SACCOs. With those remarks, I beg to second."
}