The Cooperatives Bill, 2024
Status Timeline
Proposed
Done ยท 17 Sep 2026
Public Review
Done
Debate
Done
Executive
Active now
Final
Pending
A New Four-Tier Cooperative Structure
Clause 19 establishes a clear four-tier hierarchy for cooperatives in Kenya:
- Primary Cooperatives: Formed by at least 10 individuals to promote common socio-economic interests (Clause 20, 29).
- Secondary Cooperatives: Restricting membership to primary cooperatives to handle aggregation, processing, and value addition (Clause 22).
- Cooperative Federations: Formed by at least two secondary cooperatives to set subsector standards and codes of conduct (Clause 23).
- Apex Cooperative: A single national body representing the interests of cooperatives locally and internationally (Clause 24, 25).
Devolved Administration and Inter-Governmental Coordination
The Bill splits supervisory duties between the national and county governments:
- Office of the Commissioner: A national office responsible for the registration, growth, and general regulation of all cooperatives (Clauses 6, 9).
- Office of the County Director: Appointed by county governments to supervise and inspect local primary and secondary cooperatives (Clauses 11, 14).
- Inter-Governmental Cooperatives Relations Technical Forum: Established under Clause 16 to coordinate cooperative activities and policy proposals between the national and county governments.
Stricter Reporting, Audits, and Financial Management
Cooperatives face rigorous financial obligations under the Bill:
- Must keep books of accounts compliant with International Accounting Standards (Clause 55).
- Board of directors must cause financial statements to be audited within 4 months after the end of the financial year (Clause 55(8)). Failure to do so leads to the automatic loss of board seats and a 3-year ban on re-election (Clause 55(12)).
- Requires employers to remit deducted employee contributions within 7 days, under pain of paying compound interest at 5% per month on unremitted sums (Clause 73(1)).
Severe Criminal Penalties for Misconduct and Fraud
The Bill introduces stringent penalties for administrative and criminal offenses:
- A general penalty of a fine up to KSh 1 million, imprisonment up to 5 years, or both for offences without specific penalties (Clause 162).
- Falsifying documents, concealing property, or fraudulent trading during liquidation carries fines up to KSh 2 million and/or imprisonment up to 5 years (Third Schedule, Paragraphs 1, 4).
- Unlawful use of restricted terms like "Cooperative", "Sacco", or "SICO" is punishable by fines up to KSh 500,000, up to 5 years in prison, or both (Clauses 41, 42, 43).
Bill No.
No. 7 of 2024
Gazette No.
Supplement No. 32
Sponsor
Kimani Ichung'wah
Background
The Cooperatives Bill, 2024 seeks to align the cooperative sector with the Constitution of Kenya, 2010, which devolves cooperative governance to county governments while retaining certain policy and registration roles at the national level. It repeals the Cooperative Societies Act, No. 12 of 1997, to provide a modern regulatory regime that promotes a sustainable and competitive cooperative sector.
Key Amendments
- Four-Tier Structure (Part III): Formally structures the cooperative sector into primary cooperatives, secondary cooperatives, cooperative federations, and a single Apex Cooperative.
- Devolved Supervision (Part II): Creates a dual-layered administrative system consisting of a national Commissioner for Cooperative Development and County Directors for Cooperatives in each of the 47 counties.
- Cooperative Tribunal (Part XV): Transitioning from the previous regime, the Cooperative Tribunal is given unlimited jurisdiction over cooperative disputes, with its members appointed by the Judicial Service Commission.
New Obligations
- Registration Requirements (Clause 29): Registration requires at least 10 persons for primary cooperatives, at least 2 primary cooperatives for secondary cooperatives, and at least 2 secondary cooperatives for a federation.
- Employer Remittances (Clause 73): Employers must remit employee cooperative deductions within seven days from the date the deduction was made.
- Usage of Restricted Names (Part IV): No entity may use the words "Cooperative", "Sacco", "SICO", "TRANS-COOP", or their derivatives without being duly registered under this Act.
- Annual General Meetings (Clause 57): A cooperative must hold an annual general meeting within four months after the end of each financial year.
Penalties
- Failure to Audit (Clause 55(12)): Members of the board of directors automatically lose their positions and are ineligible for re-election for three years if they fail to cause the cooperative's financial statements to be audited within the prescribed period.
- Unremitted Employer Deductions (Clause 73): Employers who fail to remit deductions face liability for the unremitted sum plus compound interest of 5% per month.
- Unlawful Use of Restricted Words (Clause 41-43): Any person unlawfully using the word "Cooperative" or "Sacco" commits an offense, facing a fine up to KSh 500,000, imprisonment up to 5 years, or both.
- General Penalty (Clause 162): Any person who commits an offense under this Act for which no specific penalty is provided is liable to a fine not exceeding KSh 1 million, imprisonment for up to 5 years, or both.
- Liquidation Frauds (Third Schedule): Concealing property, falsifying entries, or making material omissions in statements during liquidation is punishable by fines up to KSh 2 million, imprisonment up to 5 years, or both.
Transitional Provisions
- Repeal of Existing Law (Clause 163): The Cooperative Societies Act, No. 12 of 1997 is repealed. All existing cooperatives, by-laws, and registers remain valid as if registered under the new Act.
- Compliance Grace Period (Clause 163(3)): Existing cooperatives and officers have 18 months from the commencement date to comply with any new requirements under this Act.
- Public Officer Ethics (Clause 164): Paragraph 7 of the Public Officer Ethics Regulations, 2003 is repealed within twelve months of the Act's commencement, and the Ethics Commission for Cooperatives is dissolved.
Gazettement
The Cooperatives Bill, 2024 was published in the Kenya Gazette on 9 February 2024.
First Reading
The Bill was read a First Time in the National Assembly on 9 April 2024.
Second Reading
The Bill underwent its Second Reading in the National Assembly, with debate concluding on 19 November 2024.
Committee of the Whole House
The Bill was considered clause-by-clause in the Committee of the Whole House, concluding on 3 December 2024.
Third Reading
The Bill passed its Third Reading in the National Assembly on 3 December 2024.
Bi-cameral Consideration
The Bill was forwarded to the Senate for consideration on 16 January 2025.
Bi-cameral Consideration
A message conveying Senate amendments to the Bill was received in the National Assembly on 19 November 2025.
Mediation (Bicameral)
The National Assembly rejected the Senate amendments on 14 April 2026, referring the Bill to a Mediation Committee.