Factors that cause the formation of cooperative societies in Kenya.

  

Date Posted: 9/15/2012 11:13:41 AM

Posted By: SimonMburu  Membership Level: Silver  Total Points: 838

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Co-operative societies are one of the forms of business unit that drive the economy of Kenya. Through these cooperatives, many lives have been transformed therefore improved standards of living. Cooperative societies are formed by individuals who have a common goal and come together to achieve their goals. In the past few years, the growth of cooperative societies in Kenya has been very rapid due to the following reasons;

1. Availability of common goals: There has been an availabilty of common business ideas among many Kenyans therefore leading to the formation of cooperatives. A good example is the public transport sector where majority of people aspire to conduct business. This has led to the formation of SACCOS (Savings and Credit Cooperative Society) like the Mololine group among others.

2. Employment: Unemployment has been an economic problem in Kenya for a long time as many young people are unemployed and therefore the need to create cooperative societies in order to benefit from their ideas. These small cooperative societies benefit by getting business starting capital from the Youth Enterprise Fund among other financial institutions. Through the societies many people have secured employment.

3. Cooperative societies law: The governing laws of cooperative societies has been favourable to many people compared to the other forms of business units. Members of a society can get loans at favourable interest rates and the amount of loan given is also favourable.

4. Government funding: The government supports majority of cooperative societies especially youth societies by giving them monetary funds to boost their growth which affect the economy positively.

5. Easy formation: It's easy to form a cooperative society as few legal requirements are needed. The registrar of cooperative societies then issues a certificate of cooperative and the society is ready to start its business operations.

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