The structure of the cooperative movement is a four-tier structure. The Cooperative Societies Act recognizes these four specific categories of society, namely:
(i) the primary
(ii) the secondary
(iii) the national cooperative organizations (NACOs)
(iv) the apex societies
The term primary society has been defined by the Act to mean “a cooperative society whose membership is restricted to individual persons”.
It is created by individuals at the lowest level of structures of cooperatives. The individuals have common economic interests and a desire for promoting those interest by pooling their interests together and working as a team in order to minimize the costs of doing the same thing as individuals.
For example, artisans may find that as a group organized formally, rather than as separate individuals they are in a better position to buy in bulk materials necessary for their trade since bulk purchases attracts discounts. They are better able to organize reliable marketing outlets easily as a group since they will produce more than if they worked as individuals. So they may form a primary cooperative to enhance their objectives.
Individuals may also form savings and credit societies which will enable then to pool their money from which they can borrow in time of need. Individuals in SACCOs are able to borrow money from their societies at more reasonable terms than they would obtain from commercial banks.
Individual farmers may form a primary society which will enable them to market their produce collectively and to share facilities such as factories which can serve all of them.
Primary societies are the backbone of cooperatives in Kenya. Examples include:
1. Harambee Cooperative Savings and Credits Society Ltd, formed mainly by the employees of the Office of the President;
2. Afya Cooperative Savings and Credit Society Ltd, formed by employees of the Ministry of Health.
The Act defines a secondary society as “a cooperative society whose membership is comprised of primary societies”.
The Act further defines a cooperative union to mean “a cooperative society whose membership is restricted to primary societies”.
Similarly a district cooperative union is defined by the Act to mean “a cooperative union whose membership is restricted to primary societies having their headquarters in a particular district.”
The NACCOs offer specialized services to their affiliates. The services include insurance and banking. Currently there are 9 NACCOs, namely,
1. Cooperative Bank of Kenya ltd
2. Kenya Union of Savings and Credit Cooperative Ltd (KUSCCO)
3. Kenya Rural SACCO Societies
4. National Housing Cooperative Union Ltd (NACHU)
5. Kenya Cooperative Creameries Ltd (KCC)
6. Kenya Planters Cooperative Union Ltd (KPCU)
7. Kenya Farmers Cooperative Association Ltd (KFA)
8. Cooperative Data and Information Centre (CODIC) Ltd
9. Cooperative Insurance Company Ltd(CIC)
The apex societies
The Act defines an apex society as meaning “a cooperative society the membership of which is restricted to cooperative unions and includes a society established to serve the cooperative movement by providing facilities for banking, insurance and the supply of goods and services.”
The apex organization in Kenya is the Kenya National Federation of Cooperatives. It is the mouthpiece for Kenyan cooperatives to preserve and propagate both in the country and abroad the cooperative principles and values on which the movement was founded.