Kenya’s cooperative movement is not just a relic of the past; it is a powerful engine driving the nation’s economic resilience and financial inclusion.
With more than 30,000 registered cooperatives, 14 million members and a contribution of 20 per cent to the national GDP, cooperatives have long played an essential, though often overlooked, role in the country’s development.
As the world grapples with rising inequality and the impacts of climate change, Kenya’s cooperative model offers a proven pathway to equitable and sustainable growth. Their role in shaping the future of this nation cannot be overstated.
The cooperative movement is a cornerstone of the Kenyan economy, controlling assets worth Sh1.7 trillion and directly employing more than 300,000 individuals.
These community-driven organisations empower marginalised groups—including smallholder farmers, women and youth—by pooling resources, accessing markets and mitigating risks.
For instance, the Machakos cooperative union enables coffee farmers to sell directly through the Nairobi Coffee Exchange, ensuring prompt payments and streamlined loan recovery.
This model transforms agriculture from subsistence farming into profitable enterprises, uplifting entire communities and fostering economic independence.
While traditional financial institutions have often neglected rural and low-income populations, cooperatives have bridged this gap, democratising finance for millions of Kenyans.
Savings and Credit Cooperative Organisations, for instance, have expanded access to affordable credit without the need for collateral.
Instead, these institutions rely on member guarantees, a system that has proven particularly effective in agricultural communities, where 42 per cent of the workforce now benefits from Sacco loans.
Moreover, digital innovations, such as mobile money integration, have enhanced the ability of cooperatives to reach even the most underserved populations.
Cooperatives have also proven to be resilient in the face of crises. During the Covid-19 pandemic, members of cooperatives were able to recover faster than non-members, thanks to the trust built through shared resources and community solidarity.
In the agricultural sector, innovations such as index-based livestock insurance, bundled with mobile apps like AfriScout, have helped pastoralists protect their livestock against the effects of droughts, showcasing how cooperatives are not only vital to economic growth but also to environmental resilience.
The Kenyan government has recognised the central role cooperatives play in the nation’s development. Through the Bottom-Up Economic Transformation Agenda, the government has prioritised cooperatives as vehicles for job creation and wealth distribution.
Reforms aimed at strengthening the sector, including deposit guarantees and shared service platforms, are already in place to increase the credibility and reach of Saccos. International partners have also invested heavily in the cooperative sector.
The Kenya Cooperative Development Programme has trained more than 15 agricultural cooperatives in strategic management, while the CLEAR initiative has helped launch worker cooperatives in urban areas, such as the Women in Sustainable Energy and Entrepreneurship cooperative.
These efforts underscore the global commitment to supporting Kenya’s cooperative sector as a driver of sustainable economic growth.
Despite these successes, the cooperative movement faces significant challenges. Governance issues, lack of technological adoption and limited access to capital remain major obstacles.
For instance, only 16.96 per cent of Sacco lending is directed towards agriculture, despite the sector’s dominance in the economy. To ensure that cooperatives continue to thrive, the sector must embrace digital transformation.
The integration of AI and blockchain technology could streamline operations and increase transparency, making cooperatives more competitive and capable of serving their members more effectively.
The Cooperative University of Kenya has an important role to play in researching and developing tech-driven solutions for the sector.
Furthermore, Kenya must create youth-centric models to engage the next generation. Platform cooperatives, which harness the power of technology to create shared wealth, represent a promising avenue for attracting the tech-savvy youth into the cooperative movement.
Kenya’s cooperatives are more than just economic institutions—they embody a philosophy of shared prosperity. As we mark the 2025 International Year of Cooperatives, it is crucial that we, as a nation, double down on this model.
Addressing governance gaps, accelerating digital transformation and aligning cooperatives with global frameworks like the New Delhi Action Agenda will ensure that they continue to drive inclusive and sustainable growth.
By strengthening the cooperative sector, we can fulfill the promises of Vision 2030, creating a future where no Kenyan is left behind.
Okango is a political strategist and expert in leadership and governance
