African Journal of Co-operative Development and Technology

The The Role and Effectiveness of the Cooperative Business Model in Economic Recovery Strategy and Resilience Building Post-Covid-19: A Co-operative solution to disasters

Joab Langi Osumba — 2022-12-31

Whereas economic crises often require co-operative approaches to stabilize, recover and revive the free market system, Covid-19 has triggered a new debate regarding the role of the cooperative business model in the resilience of enterprises and economies. A major question donor community and development partners interested in private sector approach to resilience are asking is whether to go through Micro, Small and Medium-sized Enterprises (MSMEs) or cooperatives. The cooperative enterprise has been disparaged as an ineffective, non-attractive business model compared to the competitive enterprise MSME model. The main objective of the study was to assess the performance and effectiveness of the cooperative model vis-à-vis MSME model in supporting economic recovery and resilience building post-shocks. The study, based on Systems Theory, adopted a historical scoping research design and used a literature review approach. The findings revealed that economic recovery models that seek to recover, restore, and revive a collapsed capitalist system are mostly “co-operative” in nature, and are critical in stabilizing fragile economic systems. The cooperative business model: (i) is robust enough to rescue economies from collapse and reverse economic fortunes, and (ii) has capacity challenges in cooperative governance that need to be addressed for the model to effectively contribute to resilience building in future. Economic recovery from Covid-19 should focus on addressing capacity challenges in cooperative governance and establishing ‘Marshall Plan Style’ programme to strengthen their role in fostering economic resilience. The focus should be on levels of capitalisation of cooperatives, strengthened governance and cooperative entrepreneurship, ensuring robust oversight to cushion members, and de-risking them from the threat of governance-induced collapse, erring on the side of appropriate response in times of crises.

Profiling Housing Co-operative Models in Addressing Shortage of Affordable Housing in Nairobi City County, Kenya

Enock Onduko M. — 2024-04-23

Housing is a fundamental right and every person is entitled to this basic need. However, the biggest challenge facing Kenya is lack of affordable housing especially for low- and middle-income households in urban areas. We profile housing cooperative models and examine their suitability in addressing shortage of affordable housing in Nairobi City County. Specifically, we: (i) profile housing cooperative models adopted by housing cooperatives in Nairobi City County and (ii) examine the suitability of the models in provision of affordable housing. A qualitative approach using semi-structured interviews was adopted to generate data on how the housing co-operative models formed, membership characteristics, management practices, financing models and ownership practices. The paper is anchored on transaction cost theory. The target population consists of all active housing cooperatives registered by the State Department of Cooperatives in Nairobi City County as of December 2017. The sample size selection for this exploratory study was based on data saturation criteria. Purposive sampling technique was used to select 10 key informants, based on their technical expertise and knowledge. Thematic content analysis was used to analyze the qualitative data. Findings revealed that the limited housing cooperative model is most used among the members of housing cooperatives in Nairobi City County. However, the model failed to take into consideration collective efforts of members in terms of collective housing construction which bring down the total cost of construction. The paper recommends restructuring of housing finance system to take into consideration
issues of low- and middle-income households for adoption of a multiple mortgage housing cooperative model.

Demystifying the Sixth Co-operative Principle: Interplay between Framework and Digital Era on Growth in Deposit Taking Co-operatives in Kenya

Wilson Metto K. — 2022-12-31

Co-operatives are indispensable in economic development worldwide. The World Bank, International Co-operative Alliance and International Labor Organization acknowledge co-operatives role in fighting poverty and promoting equity. The guidelines through which co-operatives put their ethics, values and beliefs into practice are embodied in co-operative principles. However, although the sixth principle emphasizes co-operation among co-operatives at local, national, regional and international levels, it is yet to be
practiced adequately due to limited understanding. This paper seeks to demystify the sixth co-operative principle by examining the effect of the interplay between the co-operative framework and digital era on the growth of Deposit Taking co-operatives in Kenya. It is anchored on co-operative socialistic school of thought by Marxist Lerin. The theory states that co-operatives are social enterprises aimed at transforming societies by removing the ills of capitalism through co-operative ethics of self-help and solidarity. Quantitative secondary data from SACCOs Regulatory Authority (SASRA) data base in 175 Deposit Taking co-operatives using cross-sectional research design and census sampling technique is used. Data were analyzed with the aid of binary logistic regression. The findings indicate that the interplay between co-operative framework and digital era accelerates co-operation among co-operatives (p values all <0.05). In addition, it improves service to members and increases co-indicators that lead to increase in co-operation among co-operatives, hence enhancing service to members and co- , were computer hardware, software and skills. Other co-operative framework indicators identified were co-operative identity, structure, policy and environment. The study recommends to co-operative managers and board to embrace co-operative framework and digital era to accelerate co-operation among cooperatives and provide better services to member leading to co-operative movement's growth.

Strategic Human Capital: The Antecedent for Superior Performance of Deposit Taking SACCOs in Kiambu County, Kenya

Jacquiline Kageni — 2022-12-31

Savings and Credit Cooperatives often struggle to keep pace with the rapid changing technological advancement and stiff competition from larger financial institutions like commercial banks. The way in which Deposit Taking, savings and Credit Cooperatives (SACCOs) and financial institutions utilize strategic resources defines their competitive advantage and performance. This study investigated the influence of strategic human resources on performance of deposit taking SACCOs in Kiambu County. The study was hinged on resource-based view theory. Descriptive survey research design was adopted. The target population was 227 management staff consisting of 26 top level, 67 middle level, and 134 lower-level management staff in Kiambu County. Stratified sampling technique was used to select a sample of 14 top level, 36 middle level, and 71 lower-level management staff. Primary data for the study was collected using a semi-structured questionnaire. Drop and pick method was adopted in administering the questionnaire. Face and content validity of the research coefficient. A coefficient of 0.7 or above was considered adequate in the study. R2 was used to measure the predictive power of the model, while F-statistic was used to determine the fitness of the model. The significance of the study variables in influencing performance of SACCOs was based on the p-values of each variable at 0.05 significance level. Results of the study indicated that strategic human resources were deployed to a moderate extent. Further, a positive correlation existed between performance of DTS and strategic human resources. Strategic human resources predicted performance of DTS in Kiambu County (p<0.05). The study therefore concluded that strategic human resources have significant influence on performance of DTS in Kiambu County. The study recommends that the management of DTS should emphasize on acquiring and optimally utilizing strategic resources since they significantly influence their performance.

Mediating Effect of Positioning Co-operatives on Post Covid-19 Economic Resilience Dilemma: Evidence from Deposit Taking SACCOs in Kenya

Wilson Metto K. — 2022-12-31

In 2019 China reported an upper infectious respiratory viral disease, Covid 19, which spread worldwide posing a unprecedented threat in the history of mankind. Whereas the economic impact including fatalities was high, in the recent months most affected economies are beginning to debate on the best robust approach of economic recovery. Although United Nations advocates for
Social Solidarity Economy (SSE), people have limited understanding about it. This paper contributes to debate about SEE by examining the mediating effect of Deposit Taking (DT) Savings and Credit Co-operative Societies (SACCOs) on the economic resilience dilemma. The commonwealth co-operative school of thought theory guided the study. The theory states that co-operatives are social-economic institutions started by people having a common bond so as to meet their social-economic problems. A sample of 175 DT SACCOs was purposively taken using descriptive research design. Secondary data was collected from SACCOs Societies Regulatory Authority (SASRA) database and reliability test ascertained by carrying out test retest of the instruments. Data were analyzed through binary logistic regression whereby independent variables were categorical while the dependent variable was binary. Findings indicated that SACCOs had a positive significant relationship on economic resilience. The p-values for the types of SACCOs Government, Teachers, Farmers, and Private and Community based and output on savings, income, employment, loans, deposits and assets tested were less than 0.05. It was concluded that the DT SACCOs had significant relationship with economic recovery. The study recommended economies to consider SACCOs form of SSE as vehicles for economic recovery.

Collaboration among Government Co-operative Supporting Organisations in Innovations Design and Dissemination to Primary Co-operative Societies in Tanzania

Luka Njau S. — 2024-04-23

Most primary co-operatives in Tanzania have experienced various challenges including resources deficit, mismanagement, inadequate co-operative education and global competition among others making them unable to design and utilise sound innovations. In realization of such challenges and recognition of their socio-economic potential, several government co-operative supporting organisations (GCSOs) have been established to facilitate co-operative growth and development. This study assessed the extent of collaboration among GCSOs in innovations design and dissemination to primary co-operative societies (PCSos) in Tanzania. Specifically, the study established the initiatives undertaken in each innovation chain of the studied GCSOs in terms of innovation ideas generation, conversion and dissemination to PCSos in the past fifteen years (2007-2022) period; determined the extent to which GCSOs have been collaborating in areas of innovations design and dissemination to PCSos and established the innovations designed and disseminated in collaboration among studied GCSOs to PCSos in the period under study (2007-2022). The study adopted the case study research design using multiple cases where five cases were picked. The study population included the selected GCSOs operating in Tanzania which formed the unit of analysis for this study. Primary data were collected from GCSOs executives and staff using focus groups-participant observation was also used. The findings show that, the innovation chains of most of the studied GCSOs were weak and disjointed. Equally, innovation collaboration was found to be lacking in most of the GCSOs. Moreover, limited traces of inter-organisational collaboration in innovations design and dissemination to PCSos were found. It is advised that GCSOs should work to ensure innovation value chain strengths through genuine allocation and prioritisation of resources. More efforts such as setting innovation units and or hubs, among others to enhance innovation activities and collaborations within GCSOs are advised. Such efforts may eventually graduate into inter-organisational collaborations which are currently missing.

Co-operative Governance and Financial Performance of Irish Potato Farmers’ Co-operatives in Northern and Western Provinces, Rwanda

Charles Uwaramutse — 2022-12-31

Farmer co-operatives are considered the backbone of agricultural development and the main pillars in facilitating socio and economic development. However, their contribution is small in many countries due to governance problems. This paper investigated the effect of governance on financial performance among Irish potato farmers’ co-operatives (IPFCs). To address the objectives of the paper, data were collected from 32 primary co-operatives that had complied with audited financial reports in Northern and Western Provinces. Questionnaire, focus group discussions and key informant interviews were used to collect primary data. Secondary data from audited financial statements were collected to analyse selected co-operatives’ financial performance in terms of Return On Assets. Pearson correlation and multiple regression were used for data analysis. The results showed that members' participation, accountability, transparency, and leadership are significant factors contributing to the financial performance of IPFCs. However, the relationship between policy compliance on financial performance, co-operative structure and financial performance was not statistically significant. As revealed, most IPFCs experience poor leadership to run their co-operatives smoothly. Based on the findings, Rwanda Co-operative Agency (RCA) and other community development partners should organise ongoing capacity-building training for IPFCs’ leaders, to ensure self-governance and curtail the interference of local authorities within the administration of co-operatives under the pretext of reported mismanagement and poor leadership. This paper generates facts to
inform IPFCs, community development partners, and policymakers about the major factors that can affect the financial performance of farmers’ co-operatives. In addition, the paper contributes to the literature by analysing governance practices that affect the financial performance of agricultural co-operatives in developing countries perspective.

Does Tanzania Succeed in Sectoral Cooperation among Cooperatives in the Post- Covid -19 Recovery?

Damian Sambuo — 2024-04-23

COVID-19 disrupted the global economy and escalated poverty across countries, Tanzania inclusive. In noting the sixth cooperative principle, cooperation among cooperatives with inclusions of other economic sectors remains inevitable to fight this disruption. The present study examined socio-economic cooperation among cooperatives during the post-Covid-19 era. The actor websites and Mobile phone interviews to collect appropriate data. Data were analysed by using content analysis approach. This study found that there is a direct description of how the sixth principle commensurate with Co-operative Societies Act No. 6 of 2013. Partners were establishing cooperation -born of the Tanzania National Co-operative Bank-NCB. Other cooperation aimed to improve direct export crops and market access between Tanzania cooperative development commission and Tanzania trade development authority. The the expansion of Cooperative education. The promotion of coops insurance education Co-operatives are recommended to advocate the purchase of shares, collective securities, and bonds to widen cooperation with other co-operators. Policymakers, regulatory authorities, and stakeholders should adhere to a Covid-19 "new normal" by revieweing laws and regulations.