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BSOC 2103

RURAL CO-OPERATIVE SOCIETIES AND RURAL DEVELOPMENT

References

1. The Laws of Kenya Cap 490; The Co-operative Society Act.

2. Kenya Sessional Paper No. 10 1965; African Socialism.
3. Beyond Ujamaa in Tanzania and Uncaptured Peasantry 1980; A
Publication by Heinemann, Nairobi.

Immediately after independence, most African Countries adopted the policy

of pooling together community efforts by utilizing the spirit of African
togetherness through the co-operatives movement. Rural co-operatives
became popular means of exercising the principles of African Socialism.
According to the International Labour Organization (ILO), a co-operative
society is an association of persons who have voluntarily jointed together to
achieve a common end through the formation of a democratically controlled
organization and making equitable contribution to the capital required and
accepting a fair share of risks and benefits of the undertaking in which the
members actually participate.

Sociologically, co-operatives are seen as formal organizations which exploit

the principles of collective actions for the direct benefit of its members.

Principles of Co-operatives

1. Open Membership: Exit and entrance into a co-operative by any

person over a specified age and sane mind is voluntary – and of
course after some formalities have been entered.
2. Democratic Control: Every member of the co-operative has a say in
the functioning of the co-operative i.e one-man one-vote principle.
3. Self-help Organization: The co-operative helps to serve the interest
of the members i.e they are mutual self-help organizations.

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4. Spontaneous Organizations: Co-operatives are expected to be

evolutionary in growth.
5. Bottom-up administered organizations: The local people or members
are at liberty to decide on all the affairs concerning their organization
without being imposed on by the government or any other
development agency

Classifications of Co-operatives

Co-operatives can be classified into three basic categories in which they can
fall into: -

1. Size
a) Local based e.g. community co-operatives.
b) Regional based e.g. Nakuru Teachers Co-operative
c) National based e.g. Kenya Union of Societies and Co-operatives
2. Function

On the basis of function, co-operatives are categorized as:-

a) Producer Co-operatives e.g. Tea, coffee, etc.

b) Service Co-operatives e.g Consumer Co-operatives, Savings and Credit
Co-operatives, Marketing Co-operatives etc
c) Multi-purpose Co-operatives e.g. Producer-marketing and consumer
co-operatives, etc
3. Sector

On the basis of sector, co-operatives are categorized into:-

a) Agricultural based e.g. KFA

b) Industrial based e.g. ICDC, Jua Kali Artisans, etc
c) Financial based e.g. Co-operative Bank, SACCOs, etc

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The Role of Co-operatives in Rural Development

Co-operatives exist to perform a variety of functions in society as related to

rural development as well as national development.

a) Co-operatives act as change agents in rural areas: Co-

operatives bring about new ideas or information geared to the
improvement of the rural people’s life. Traditional rural societies
subsistence-based sector has been transformed to modern
sector through the co-operatives organizations.
b) They encourage self-reliance among the rural people: This is
made possible by the diversified investments undertaken by
the rural people with the assistance of the cooperative
societies.
c) Co-operatives ensure local level mass participation in rural and
national development: With each member of the society
getter involved in co-operative activities, the base for
community development becomes widened.
d) Co-operatives provide banking services to the rural community
where in most cases banking services are limited or lacking.
e) Co-operatives act as means of increase agricultural
productivity through extension services and provision of credit
facilities.
f) The also serve as agricultural markets on behalf of the small-
scale farmer who could not do it on their own e.g small-scale
coffee or tea farmers.
g) Co-operatives promote equitable distribution of wealth or
income. This is made possible through their encouragements
on income generating activities especially among the small-
scale farmers in the rural areas. In the long-run therefore,
economic disparities between individuals and regions are
reduced.

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h) By bringing people together to work under the same

environment and for the same goals, co-operatives tend to
provide a sense of belonging, identity and pride to the rural
people.
i) They provide social security. The security is achieved through
exchange of assistance among members especially when one
is confronted by misfortunes or emergencies.
j) Co-operatives are seen to propagate the ideas of African
Socialism based on social mutual responsibility among
members.
k) They provide infrastructural facilities. These are in the form of
storage facilities, schools, health centres, and other
recreational facilities.
l) They also offer employment opportunities to the rural people.
m) They act as an education forum to the members and rural
people in general.

Main Obstacles Faced by Rural Co-operatives

1. Poor Leadership: Most of the rural co-operatives are

incompetent, lack skills and are sometimes corrupt. Such
people end up misappropriating funds, which draw back the
efforts of the individual members.
2. Domination of ordinary members by powerful or successful
individuals. Some elites have dominated and benefited from
the co-operatives than they should because they have an
upper hand compared to the powerless poor majority. They
are elected to head the co-operatives not because of their
competence but because of their individual success in life.
They influence socio-economic decisions to suit their individual
goals. In the long-run, the ordinary poor man benefits every

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little, if anything. In this way, the movement has lost its support
and effectiveness as a community development effort among
the majority of the country’s population.
3. Clanism and Politics: Leadership in rural co-operatives is usually
decided on the basis of local politics i.e. who supports who.
Bitter exchange of words and physical confrontations have
occasionally been the eventualities e.g. coffee and tea co-
operative societies.
4. Default of Loans. Some of the co-operative members who
benefit from the co-operatives materially, financially or
otherwise end up not repaying and this has paralyzed the
operations of many co-operatives e.g. KFA – formerly KGGCU,
New KCC - formerly KCC, etc
5. Large Membership: The larger number of people involved in
the co-operatives makes it very difficult for the members to
exercise their democratic rights. This is so because the larger
the group, the lower their solidarity. Thus, ‘oneness’ is reduced
which in itself worsens/weakens the co-operatives.
6. Ignorance of Members about their rights and Obligation. Most
of the co-operators are not aware of what to expect from the
co-operative society. They do not know how to exercise their
rights in controlling their leadership. Cases of embezzlement of
funds and other malpractices continue to eat into the co-
operatives yet members do not act. Worse off, they are unable
to insist to be given the up-to-date audited accounts of their
finance.
7. Delays or non-submission of members’ dues by employers to
the co-operatives. This has contributed to delays in approval
and processing of members loans.
8. Discriminative loan awards by the loaning officials. In some
cases, co-operative officials have awarded themselves and

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their relatives and friends helfty loans, while denying or

delaying those for the co-operators.
9. Excessive government control; Co-operatives are supposed to
be voluntary organizations but they have been, in many parts
of Africa, served as channels of government execution. They
therefore lack the normative principles of voluntary mass
participation e.g. KCC, KFA, etc

Thus, to some extent, co-operatives have not only served to reinforce the
system of stratification in rural areas but also, they have also widened the
economic disparities that already exist.

Suggested Remedies to Rural Co-operatives Obstacles

a) Education of Co-operators. This makes the members to fully

understand their rights and obligations in the co-operatives.
b) Leadership Training: Co-operative members should be trained at
the local level on how to go about project identification and
resource mobilization. They should be trained on how to
approach community members and make decisions together
regarding the projects they want the location of the projects and
the prioritization of the projects based on the needs of the
community.
c) Reduction of over Bureaucratization due to excessive government
control: Co-operative movement should be fully liberalized and
supervised by the ministry of co-operatives so as to assist in the
prosecution of co-operatives funds embezzlements or
misappropriations. This will help enhance the popular
participation of co-operative members.
d) Set Maximum Limits of Co-operative Membership. Co-operatives
would serve their members better if their numbers were reduced

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to appreciable sizes to enhance solidarity between the leaders

and the members and among the members themselves.
e) Strengthen the prosecution of those who embezzle or
misappropriate co-operative funds. This can be achieved through
the establishment of independent co-operative courts.
f) Taking of Insurance cover for the members’ funds. The co-
operatives funds should be insured against such risks a theft, death
of members with loans, etc
g) Provision of Loan Securities. Large amount of loans should be
accompanied with collateral securities to safeguard against loan
defaulting.

Conclusively, therefore, it is important to note that major changes have been

realized both in design and purpose of co-operatives since first years of 20th
century AD. As noted earlier, the indigenous African economy of affection (i.e
communal life) where the satisfaction of one depended on the satisfaction of
all has gradually and eventually been overshadowed and replaced by the
modern form of co-operative movement, where each seeks individual
satisfaction. In other words, though modern co-operatives advocate for the
collective good will for all, basically members are interested in benefits
accruing to them as individuals and not as co-operate members.

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