Challenges facing cooperative societies in Kenya

Cooperative societies in Kenya play a crucial role in empowering communities, but they face several challenges that hinder their growth and effectiveness. These challenges, ranging from market interaction difficulties to management issues, limit their ability to thrive in a competitive environment. Here are some of the key challenges cooperatives face:
- Difficulty in Interacting with the Market
Many cooperative societies struggle to engage effectively with the market due to their size and capacity:
- Cooperatives often buy inputs in small quantities and infrequently, making them unattractive to input suppliers.
- They produce goods in such small volumes that buyers show little interest in purchasing from them.
- Members of cooperatives may feel uncomfortable dealing with larger or more formal businesses due to unfamiliarity with business norms and practices.
- Negotiating contracts or setting prices becomes challenging for cooperative members, limiting their ability to strike beneficial deals.
- Additionally, informal rules and cultural norms within cooperatives restrict their ability to participate meaningfully in commercial transactions.
- Lack of Understanding by Development Projects
Development projects sometimes fail to grasp the complexities and local realities of cooperative societies:
- In some cases, there is a lack of trust in cooperatives due to a negative history associated with them.
- In certain communities, mistrust and lack of cooperation are common, creating challenges for the smooth operation of cooperative societies.
- Management and Leadership Issues
Management problems are a significant hurdle for many cooperatives:
- Many farmers and members lack a clear understanding of cooperative management and structure.
- Mistrust often exists between the general membership and the board, leading to transparency issues.
- Additionally, a shortage of leadership, managerial skills, and financial expertise hampers the effective running of cooperatives.
- Limited Member Participation
Low member involvement is another challenge that weakens cooperative performance:
- Members may agree with the idea of cooperation but are hesitant to pool their finances for collective business.
- Many farmers focus on their individual businesses, giving little time and attention to cooperative activities.
- Differences in education levels and self-confidence prevent some members from actively participating.
- In some cases, cooperatives are formed for the wrong reasons, with members expecting free inputs or handouts rather than genuine collective benefits.
- Non-support of Cooperative Contracts
Many cooperatives face issues with members not supporting contracts:
- A common problem in agricultural cooperatives is side-selling, where members sell their products outside of the cooperative. This undermines the cooperative’s ability to meet production goals and maintain long-term relationships with buyers.
- Geographical and Demographic Challenges
Operational challenges arise due to the composition and spread of cooperative members:
- Cooperative members are often geographically dispersed, making communication difficult.
- Many members tend to be older and more resistant to change, further complicating efforts to innovate or improve cooperative operations.
- Side-Selling by Members
One of the most persistent challenges, especially in agricultural cooperatives, is side-selling:
- Members sometimes bypass the cooperative and sell their produce to other buyers who offer better prices. This not only weakens the cooperative’s ability to fulfill contracts but also damages trust between members and the cooperative.