Social Inclusion in Member Participation, Legislation and Financial Performance of Agricultural Co-operatives in Kenya

Abstract

Despite the central role of agricultural cooperatives in promoting inclusive rural development in Kenya, social exclusion in member participation based on gender, age, and socioeconomic status persists, potentially undermining their financial performance. While agricultural cooperatives are founded on principles of democratic and inclusive member participation, empirical evidence on how social inclusion in member participation affects financial performance, particularly under varying legislative environments remains limited. This study investigated the relationship between social inclusion in member participation and the financial performance of agricultural cooperatives in Kenya, with legislation examined as a moderating factor. Grounded in the theory of intersectionality, the study explored how overlapping social identities such as gender, age, and socioeconomic status influence member participation and financial performance. A mixed methods research design was adopted, targeting 57,640 members drawn from 31 agricultural cooperatives in Kiambu and Kajiado counties for the period 2019 to 2023. A multistage sampling technique was employed, involving purposive sampling of counties and agricultural cooperatives, followed by stratified random sampling to ensure representation across gender, youth, and other identity groups. A final sample size of 397 respondents was achieved. Social inclusion in member participation was measured using indicators such as participation in meetings, voting rights, access to leadership, and benefit-sharing, while financial performance was assessed using surplus margins, liquidity, and audit reports. Regression analysis revealed that social inclusion in member participation significantly influenced financial performance (R = 0.534; R² = 0.285), indicating that 28.5% of the variance in financial performance was explained by inclusive participation. When legislation was introduced as a moderating variable, the explanatory power increased (R = 0.561; R² = 0.314), demonstrating that supportive legislative frameworks strengthen the effect of social inclusion on cooperative financial performance. The study concluded that deliberate promotion of social inclusion in member participation enhances financial performance and recommended that agricultural cooperative leaders and policymakers institutionalize inclusive participation practices and enact enabling legislation to improve cooperative resilience and sustainability.