Factors influencing the performance of Sugarcane outgrowers cooperative societies in Kenya: A case of Nzoia outgrowers cooperative in Bungoma county

Abstract

Nzoia Outgrowers Cooperative was registered by the mmistry of cooperative development and marketing in 1987.The members are drawn from sugarcane farmers' contracted to Nzoia Sugar Company. The society has 3400 registered members against a potential of 65258 sugarcane growers in the entire Nzoia Sugar Scheme of Bungoma County. The performance of Nzoia Outgrowers Cooperative has been declining until the accumulated loan with accrued interest is 42 million against shareholding capital of 29.6 million, the difference of 12.4 million renders the society insolvent. The purpose of this study was to investigate factors influencing the performance of Sugarcane Outgrowers Cooperatives in Kenya; a case of Nzoia Outgrowers Cooperative in Bungoma County. The objectives covered by this study were: to find out the members attitudes towards the performance ofNzoia Outgrowers Cooperative in Bungoma in Bungoma county, to find out the competence of management and staff of Nzoia Outgrowers Cooperative in Bungoma County, to find out the members possession of investment knowledge and awareness on the management of cooperatives of Nzoia Outgrowers Cooperative in Bungoma County, to find out the level of compliance with the best practice lending procedures in Nzoia Outgrowers Cooperative in Bungoma County. The study was guided by Ajzen and Fishbein's theory of 1998. According to this theory, behaviour comes into existence following a chain of factors. This study was conducted through descriptive survey research design. The target population was 3453 people. The sample comprised of 358 members, 14 management 5 staff, 33 delegates and 1 District Cooperative Officer. The following instruments were used to collect data; open and closed--ended structured questionnaires and document analysis. Collected data was analysed by use of descriptive statistics, frequencies, percentages, means, standard deviations and variance. The study revealed those members' attitudes towards Nzoia Outgrowers Cooperative was positive despite poor performance. The level of competence of management and staff was below average and this had a negative impact on the performance of the society. Most members had awareness on the management of cooperatives but lacked investment knowledge. The members were aware of the existence of the society's by-laws, however, they were not satisfied with the lending procedure and the level of compliance to the laid down by-laws and procedures was below average. It was recommended that the county government of Bungoma to have an integrated approach in a creating a cooperative and savings culture in farmers dealing with industry crops such as sugarcane. The sugarcane millers should be encouraged and agreements made for timely payment should be made through the SACCO to facilitate check-off system on loan recoveries. Management and staff competence should be improved by electing board members and hiring staff that are qualified. Education and training should be given to management staff and members of SACCO to inculcate a culture of entrepreneurship. Control measures should be instituted which includes; well defined institutional rules of governance, internal controls, service adequacy, prudential management disciplines and external supervision. The findings will be useful to the central government, county government and the entire sugarcane industry.