The government has issued new directives to strengthen governance, transparency, and accountability within the co-operative sector.  Cooperative and MSME Cabinet Secretary Wycliffe Oparanya directed all cooperatives that have not filed their annual returns to do so by the end of June 30, 2025 failure to which, the institutions will be deregistered from the cooperative register.

As stipulated under the Cooperative Societies Act all cooperative societies, including unions, national cooperative organisations, and apex cooperatives, are required to file their annual returns in the prescribed manner and within the specified timeframe – April 30 each year.

“Unfortunately, we have observed a growing number of societies failing to meet this legal obligation, thereby exposing themselves to the risk of deregistration,” said Oparanya when he closed a one-week ethical leadership and governance conference for cooperatives leaders at a Naivasha hotel yesterday.

He added, “Let me be clear: Any cooperative society that has failed to file its returns for the last three years and within the stipulated timelines will be struck off from the Cooperative Register and will cease to exist as a corporate entity. This directive takes immediate effect, and all cooperative entities are expected to comply fully.” The CS noted that some cooperative societies have grown their membership to more than 10,000 members thus making it hard to convene annual general meetings.

“The law—specifically Section 27(1) of the Cooperative Societies Act—vests the supreme authority of a cooperative society in the general meeting, where members have the right to attend, participate, and vote. Sections 19 and 21(a) further affirm these rights,” he added.

But he noted in practice societies with more than 10,000 members, especially those with broad geographic coverage, it is neither practical nor efficient to hold general meetings with every member physically present. This has often led to disorganised meetings and poor decision-making processes.

“I am directing that all cooperative societies with a membership exceeding 10,000 members must amend their by-laws within the next nine months to adopt a delegate system of representation,” Oparanya directed. Under this system, he explained, no more than 500 delegates shall be selected to represent the broader membership at general meetings.

“This representation must be fair and inclusive, taking into account geographical distribution, gender balance, age diversity, and the inclusion of persons with disabilities,” Oparanya stated.

The CS said the Commissioner for cooperatives will issue  guidelines how the delegate system will be implemented.

Further, he pointed out, the sector stands to benefit more in terms of improving governance once the Cooperative Bill 2024 currently in Senate is enacted into law.

“The Cooperative Societies Bill, 2024, also introduces provisions that require cooperative leaders to meet higher expertise to make informed, strategic decisions for long educational and competency standards. This will ensure that cooperatives are guided by individuals with the right term success, he added.