Managerial response to deregulation of the cooperative sector: the case of savings and credit cooperative societies (saccos) in Nairobi

Abstract

This study had two objectives namely:- (i) To identify the impact of a deregulated cooperative sector on the management of Savings and Credit Cooperative Societies (SACCOs) in Nairobi; (ii) To find out the measures that the SACCO Societies in Nairobi are taking to cope with the effects of deregulation of the Cooperative sector. To do this, a survey was conducted on fifty SACCOs using structured questionnaires with a few open ended questions. The results of this study revealed that about 50% of the managers had form four level of education. The study also found out that about 92% of the SACCOs surveyed concentrated on operational issues at the expense of strategic ones. It was also clear that not much effort was being expended to explore new products. There was also found to be arbitrary appointments and promotions of staff without regard to their qualifications and competence. These issues have very serious ramifications for the future developments and growth of the SACCO Societies. Since the cooperative sector has been identified by the government of Kenya as a formidable institutional framework for resource mobilization and capital accumulation these issues must be addressed ur[ently. This study concludes that there needs to be deliberate policy on minimum qualifications for management positions. Promotions must be based on merit and proven ability. SACCO Societies should constantly scan the environment to help them in coming up with flexible strategies for future development. An open systems approach should be adopted to encourage creativity and innovation so that new products can be introduced to take care of the changing needs of members. Last but not least, SACCO Societies should go beyond the horizon ofthe employer to source for members in order to strengthen membership and capital bases.