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{
    "id": 435867,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/435867/?format=api",
    "text_counter": 60,
    "type": "speech",
    "speaker_name": "Hon. (Ms.) Kajuju",
    "speaker_title": "",
    "speaker": {
        "id": 840,
        "legal_name": "Florence Kajuju",
        "slug": "florence-kajuju"
    },
    "content": "However, the Bill should take cognizance of the fact that the licensing, supervision, and the regulation of SACCOs as deposit taking institutions is not covered in the Bill. Thus domestic laws such as SACCO Societies Act ought to take precedence when it comes to prudential regulations of SACCOs. On membership of co-operatives societies in Kenya includes SACCOs as normally defined by SACCOs by-laws and not statutes as proposed by Clause 5 (2). This definition in the by-law was done through the common board principle, but which has since been abandoned by many SACCOs with the adoption of the open board policies. Clause 5 (2) of the Bill is limiting and does not agree with the current trend in Kenya where membership of SACCOs is open to a wide range of people, and not just those who live or work within a given area. On the sale of shares to third parties, Kenya’s current legal framework governing co-operatives does not envisage a situation where a co-operative society will sell its shares to third parties as proposed in Clause 5 (5) of the Bill. The law currently prohibits SACCOs from dealing with non-members; thus the issue of selling shares to other persons will not arise. A person seeking to purchase the share of a co-operative society must, therefore, join membership thereof, which may be through the normal member recruitment or as a transfer from an existing member. Such sale of shares will also violate the domestic Capital Markets Act. Clause 5 (5) should be redefined along the prevailing domestic laws in Kenya to limit sale and purchase of shares of a co-operative to members only. With regard to recognition of co-operative societies registered in other partner states, whereas Clause 7 of the Bill provides that a co-operative society shall be registered by appropriate authorities in the partner states, there is no provision to guide the reciprocal recognition of such society in other partner states, other than where it has been registered. This will hamper cross-border operations of such a co-operative society in a state other than where it has been registered. This is very necessary for deposit taking SACCOs, where domestic registration ought to guide with certainty the prudential regulation. The Bill should provide for the procedure for the recognition of the co-operative societies registered in one partner state seeking to operate within the jurisdiction of another partner state, and state whether such a co-operative will have to seek dual registration to operate in that other partner state. The Bill should also provide for mechanism for cross-border co-operative societies, particularly when it comes to deposit taking SACCOs mobilizing deposits. On settlement of disputes, or alternative dispute resolution, the Bill proposes that all disputes arising between co-operatives societies – whether between members or employees in accordance with Clause 47 thereof - ought to be settled through the ETR mechanism of conciliation and default arbitration, with appeals lying to the High Court. This provision is in direct conflict with the Co-operative Societies Act, which provides that such disputes are to be handled by a co-operative societies tribunal and appeals from the tribunal lie to the High Court. Indeed, the SACCO Societies Act provides that disputes between the Authority and the SACCOs are to be referred to the tribunal as the court of first instance, which court has original jurisdiction. Hon. Speaker, the Co-operative tribunal as established is deemed to be a specialized court for purposes of co-operative societies disputes, as a court of first The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
}