A fierce governance battle has erupted in Kenya’s cooperative sector as members forcefully resist state-imposed structural changes.

Members of Tower Sacco have unanimously rejected a controversial government directive that seeks to abolish direct member participation in Annual General Meetings for large cooperatives. The directive, issued by the Commissioner for Cooperative Development, mandates that all Saccos with membership exceeding 5,000 must adopt a delegate system. This move would replace the traditional "one member, one vote" democratic model with a representative structure, a change that Tower Sacco members argue is a calculated attempt to disenfranchise the majority.

The rejection took place during a heated Special General Meeting where members voiced their anger at what they term bureaucratic overreach. They argued that the delegate system creates a fertile ground for corruption, where a small group of representatives can be easily compromised or "pocketed" by the board of directors. The current system, they maintain, allows for transparency and direct accountability, virtues they fear will vanish if the new structure is implemented.

The Commissioner’s Directive

The Ministry of Cooperatives defends the directive as a necessary logistical evolution. With some Kenyan Saccos now boasting memberships in the tens of thousands, the government argues that holding physical meetings for all members is inefficient, costly, and chaotic. The proposed model suggests a tiered representation where members elect delegates from their specific zones or branches, who then attend the AGM to vote on budgets and elect directors. The circular gives affected societies six months to amend their bylaws and comply.

However, the resistance at Tower Sacco highlights a deep mistrust between ordinary savers and the regulatory authorities. Members feel that the essence of the cooperative movement—unity and direct ownership—is being eroded. "We did not save our money to be silenced," one member shouted during the proceedings. "We want to see the directors in the eye and ask them where our dividends are." This sentiment is echoing across the sector, with other large Saccos reportedly watching the Tower Sacco rebellion closely.

Risks of the Delegate Model

Experts in cooperative governance warn that while the delegate system solves logistical headaches, it introduces significant agency risks. In many institutions where it has been adopted, there have been reports of delegates being bribed to pass unfavorable budgets or overlook financial improprieties. The distance between the board and the ordinary member widens, creating an information asymmetry that can be exploited by unscrupulous leaders. Tower Sacco members are essentially refusing to sign a blank check to a select few intermediaries.

The standoff places the Sacco leadership in a precarious position. They are caught between a statutory order from the regulator and a militant membership base that holds the ultimate power. Failure to comply with the Commissioner’s directive could attract penalties or sanctions, including the dissolution of the board. Yet, forcing the changes through against the will of the members could spark a mass exodus of savings, threatening the liquidity and stability of the institution.

A Test Case for Democracy

This rebellion is likely to become a landmark case in Kenyan cooperative law. It raises fundamental questions about the autonomy of private member organizations versus the power of the state to regulate internal governance. If Tower Sacco succeeds in resisting the order, it could trigger a domino effect, emboldening other societies to defy the ministry. Conversely, if the government cracks down, it could stifle the vibrant democratic spirit that has made the Kenyan cooperative movement the strongest in Africa.

• The Order: All Saccos with over 5,000 members must transition to a delegate representation system within six months.
• The Resistance: Tower Sacco members argue the system breeds corruption and removes their direct oversight of funds.
• The Stakes: The outcome will set a precedent for the governance of billions of shillings in member savings across the country.

As the deadline approaches, the atmosphere remains tense. The members have drawn a line in the sand, demanding that the Commissioner withdraw the directive or face a prolonged legal and operational battle. For now, the direct democracy of the cooperative movement stands defended, but the pressure from the state is only just beginning to mount.